AP2 publishes sustainability report for the first half-year 2020

During the first half-year 2020 AP2 continued to work intensively to integrate sustainability into its management activities. The Fund approaches the issue of sustainability based on the conviction that sustainability results in better management performance, and thus in a better income pension system and a better deal for pensioners.

AP2 has decided to publish a separate report on the Fund’s sustainability work for the first half of 2020. The reason for this is that the Fund strives to be as transparent as possible and there is constantly a great deal going on in the field of sustainability. The report presents the work based on the Fund’s four sustainability focus areas: climate, corporate governance, diversity and human rights.

“During the first half of 2020, the Fund’s sustainability work was impacted to a certain extent by COVID-19, which mainly affected attendance at general meetings, but also proposals for dividends and board fees,” says Eva Halvarsson, CEO of AP2.

“One area with major need for investment is sustainable infrastructure, as energy and transport systems need to implement a rapid transition from fossil-based to renewable resources. At the end of 2019, we decided to invest in sustainable infrastructure, that is, assets that contribute to sustainable development in line with the Paris Agreement. Two investments were carried out in the first half of 2020,” says Eva Halvarsson.

Key events during the half-year

  • In May, AP2, together with 176 other investors, signed an open letter to EU leaders with recommendations aimed at supporting a sustainable economic recovery after COVID-19. The recommendations are that the EU must deliver a recovery that prioritises climate action needed for achieving the Paris Agreement’s target of net zero emissions by 2050.
  • At the end of June, AP2 and just over 30 other investors wrote an open letter to the Brazilian Embassies in the investors’ respective countries because of concerns about the increasing deforestation of the Amazon and its negative effects on the climate, biodiversity and the rights of indigenous people. The initiative has attracted a lot of attention, not least in Brazil. In July, investors, including AP2, held meetings with both representatives of the Brazilian government and the Vice President, and with the Speaker and representatives of Congress. The initiative is led by Storebrand.
  • The equity portfolio’s carbon footprint continues to decrease, both in absolute and relative terms. The reduction in total carbon emissions is mainly due to reductions in emerging markets. It is positive that both the portfolio and the companies have reduced their carbon footprint. Portfolio-weighted carbon intensity fell by no less than 15 per cent. Of the decrease, 11 percentage points were attributable to changes in holdings and four percentage points to changes in companies.
  • This year, the Fund decided to increase its voting power in global companies from the previous total of 750 to 1,000 companies. In the first half of 2020, AP2 voted at 844 foreign general meetings. AP2 also voted in 92 Swedish general meetings during the first half-year 2020.
  • In spring 2020, the Fund has worked on clarifying its preference and governance for its human rights work in order to ensure a sustained focus on prioritised issues. The work has resulted in the revision of AP2’s policy for human rights, the preparation of a strategy and the adoption of a long-term goal up to and including 2025.


The complete version of AP2’s Sustainability Report for the half-year is available at www.ap2.se.

For more information, please contact:

Eva Halvarsson, CEO of AP2, +46 (0)31 704 29 00 or

Ulrika Danielson, Head of Communications and Corporate Governance, +46 (0)709 50 16 13.

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 357.9 billion (30 June 2020), and cover essentially all asset classes across the entire world. We are leading specialists in the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term and responsible asset manager. www.ap2.se

First half-year strongly affected by COVID-19

Andra AP-fonden (AP2) reported a total return of -5.1 per cent, after costs, for the first half of 2020. The net result was SEK -19.3 billion, while the Fund’s assets totalled SEK 357.9 billion at the end of the first half of 2020. Relative to the benchmark index, the return was -0.1 per cent, excluding alternative investments and costs.

– The global outbreak of COVID-19 has impacted very strongly on the world’s securities markets trend and thereby the Fund’s portfolio value, says Eva Halvarsson, CEO of AP2.

– By the end of the first half of the year, financial markets had turned upwards and most economies had begun to recover. The stock market upturn was largely driven by emerging equities in the technology sector. This has adversely affected the Fund’s equity portfolios, which avoid concentrating excessive holdings in large companies, and instead over-weighting equities with a low valuation, says Eva Halvarsson.

– AP2’s return exceeds the Fund’s long-term return assumption of 4.5 per cent annually. In the past ten years the Fund’s average annual real return has amounted to 6.6 per cent, says Eva Halvarsson.

– During the first half of the year allocations to private equity funds and foreign real estate were increased, which was financed by a reduction in the allocation to Swedish bonds. The allocation to Chinese A-shares was also increased. The Fund also switched to an index with a sustainability focus for bonds in local currency in emerging countries, says Eva Halvarsson.

The complete half-year report (pdf) is published on the Fund’s website at www.ap2.se. AP2’s sustainability work during the first half-year 2020 is published in a separate report at www.ap2.se

For further details, please contact:
Eva Halvarsson, CEO at AP2, on +46 31 704 29 00 or Ulrika Danielson, Head of Corporate Communications, on +46 709 50 16 13.

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 357.9 billion (30 June 2020), and cover essentially all asset classes across the entire world. We are leading specialists in the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term and responsible asset manager. www.ap2.se

AP2’s Female Representation Index 2020 – slight decrease in the proportion of women on board of companies

AP2’s Female Representation Index for 2020 shows that the proportion of women represented on the boards of companies listed on Nasdaq Stockholm, for the first time since 2013, is down slightly and now amounts to 33.7 (34.0) percent. On the other hand, the proportion of women in executive positions, for the tenth consecutive year, increased and amounted to 24.3 (24.0) percent at the year’s survey. For the first time, more than 10 percent of listed companies’ CEOs are women.

“I hope that this is just one notch in the curve and that the upturn we have seen since 2013 regarding the proportion of woman on the boards continues. But it is also an alarm clock for all nomination committees that the work on diversity must continue to be actively prioritized. However, it is gratifying to see that the proportion of women in executive positions continues to increase steadily, since this is the main recruitment base for board members,” says Eva Halvarsson, CEO of AP2.

“It is interesting to once again note that the nominating committees with women correlate favourably with boards with a higher proportion of women, while boards without nominating committees have a lower proportion of female board members than other companies,” she says.

On the board of primary-listed Large-cap companies, the proportion of women is 40.3 (41.0) percent when the CEO is excluded from the board.

Of the 336 companies in the survey, 257 companies have at least 25 percent women on the board (76.5%). When it is broken down into market value groups, almost 9 out of 10 large cap companies reach the level.

Newly elected women on boards are younger than their male counterparts and female board members have on average a slightly higher number of board assignments than male members.

Background to AP2’s Female Representation Index
AP2 has since 2003 conducted an annual survey with Nordic Investor Services to determine the proportion of women at middle management level, in executive positions and on the boards of listed companies. The survey for 2019 covered 332 primary and secondary listed companies on NASDAQ Stockholm. In addition, the survey records the proportion of women who have graduated from study programmes that constitute the traditional recruitment base for management groups and boards.

For more information, please contact:
Eva Halvarsson, CEO, Andra AP-fonden (AP2), phone +46 (0)31 704 29 00
Ulrika Danielson, Head of Communications & HR, phone +46 (0)709 50 16 13

www.ap2.se

The figures refer to all companies listed on NASDAQ Stockholm, unless otherwise specified.

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 381.3 billion (31 December 2019), and cover essentially all asset classes across the entire world. We are leading specialists on the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term, responsible, asset management company. www.ap2.se

Council on Ethics influences safety in mining and focuses on deforestation, money laundering and climate efforts

The Council on Ethics of the Swedish National Pension (AP) Funds Annual Report 2019:
For more than 13 years, the AP Funds’ Council on Ethics has exercised influence on the AP Funds’ global portfolio of listed companies to improve their environmental, human rights and corporate governance work through engagement and dialogue. During 2019, the Council on Ethics’ efforts and involvement have focused on areas such as inadequate safety in managing mine waste, known as ‘tailings’. Other focus areas include money laundering, long-term environmental efforts in the oil industry, and deforestation in South America.

January 2019 saw the serious accident at Brumadinho in Brazil, when the tailings dam of mining company Vale burst, with devastating consequences. Shortly afterwards, the Church of England Pensions Board and the Council on Ethics jointly initiated a major project to make sure that mining companies take responsibility for their tailings dams. The project aims to audit and increase transparency around safety at all of the world’s tailings dams.

“It is too early yet to say whether the interventions driven by investors will suffice, but the response from investors and nations does suggest that they will do their best to get to the root of the problem. It will undoubtedly be difficult, but this will eventually lead to improved safety in the mining sector,” says John Howchin, Secretary General of the Council on Ethics of the AP Funds.

As part of the AP Funds’ overall commitment in the Climate Action 100+ project, the Council on Ethics has intensified its dialogue with Shell. Climate Action 100+ is a five-year, investor-driven initiative to systematically engage companies that have extensive emissions of greenhouse gases. Shell set a long-term goal of reducing carbon dioxide emissions in the products it sells. The target now is that net emissions from sold energy should decrease by around 20 per cent up to 2035, and should be zero by 2050.

With the aim of expanding collaboration, the Council on Ethics and the AP Funds organised a seminar involving the CEOs of four major banks, the Swedish Financial Supervisory Authority, the Swedish Economic Crime Authority and others. As independent external parties outside of the banking system, the Council on Ethics and the AP Funds are in a good position to encourage closer collaboration. Working alongside banks and government authorities, we will continue our efforts to curb economic crime.

Read more about the Council on Ethics’ company dialogues and other engagements in the 2019 Annual Report at www.etikradet.se

For further information, please contact:

John Howchin, Secretary General, Council on Ethics of the Swedish National Pension Funds, phone +46 (0)8-555 17 176 john.howchin@councilonethics.org

Christina Olivecrona, Chairman, Council on Ethics of the Swedish National Pension Funds, phone: +46 (0)31-704 29 00 christina.olivecrona@ap2.se

The Council on Ethics conducts its work based on the AP Funds’ assignment to create high long-term returns with low risk for current and future retirees, and on the common core value: to take a proactive approach to sustainable development, and to demand and act in the name of transparency and positive change. The Council on Ethics works proactively as well as reactively, engaging with the AP Funds’ global portfolio of companies. The starting point is that well-managed and responsible companies create higher long-term returns with lower risk. The aim of the Council is to ensure that companies and industries conduct their sustainability work in a systematic, structured and transparent way.

AP2 – 2019 sees strongest result ever

The 2019 result was AP2’s (Andra AP-fonden) highest ever and totalled SEK 53.0 billion. Looking at the last five and ten years, the Fund’s average return has been 7.4 and 8.4 per cent respectively. Developments during the reporting year have meant that the Fund’s return will once again exceed its long-term return commitment both in the short and in the long term.

“2019 was a year characterised by new investment rules, sustainability issues and the general global turbulence that has become the new normal. Despite the turbulence, many of the world’s financial markets experienced strong growth. The result for the year was our highest ever at SEK 53.0 billion. The return after expenses was 15.9 per cent, which is significantly higher than our long-term return expectation,” says Eva Halvarsson, CEO of AP2.

“All asset classes saw positive returns and global stock markets, above all, experienced positive development. The total return for the Fund’s Swedish share portfolio was 30.2 per cent while corresponding figures for the developed markets and emerging markets portfolios were 31.7 and 19.9 per cent respectively. The return on Chinese A-shares proved to be the Fund’s best-performing asset class, with an annual return of 52.6 per cent,” says Eva Halvarsson.

“Based on our mission we have, over the years, developed unique expertise on the analysis of pension system development and system needs going forward. This helps us construct that portfolio best suited to achieving our goal of creating maximum benefit for the pension system. In 2019 we added to this analysis further by including the risks posed by climate change to economic growth,” says Eva Halvarsson.

The English version of AP2’s Annual report and the separate Sustainability Report 2019 will be available at www.ap2.se from beginning of March.

For more information, please contact:

Eva Halvarsson, CEO of AP2, +46 (0)31 704 29 00 or

Ulrika Danielson, Head of Communications &Corporate Governance, +46 (0)709 50 16 13

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 381.3 billion (31 December 2019), and cover essentially all asset classes across the entire world. We are leading specialists on the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term, responsible, asset management company. www.ap2.se

AP2 publishes 2019 sustainability report

AP2 continued to work intensively to integrate sustainability into its management activities in 2019. The Fund approaches the issue of sustainability based on the conviction that sustainability results in better management results, and thus in a better income pension system and a better deal for pensioners. AP2 has on several occasions acted as a pioneer, for instance when it comes to investment into green and social bonds, sustainability requirements in agreements entered into with private equity funds, divestments from fossil energy companies, reporting in accordance with TCFD and, most recently, in accordance with UNGPRF.

“One issue that has strongly characterised 2019 has been sustainability. Overall interest in sustainability issues is on the rise, in part as a result of the climate change focus being raised by Greta Thunberg, but also due to more frequent publication of research reports on climate issues. Equality and human rights are other matters increasingly at the forefront of discussions,” says Eva Halvarsson, CEO of AP2.

“For AP2, sustainability issues are closely linked with our mission to create high returns for Swedish pensioners. We have spent a long time developing the way that we work with sustainability, and this is something which strongly characterises our organisation. It is also something that we tend to earn recognition for on an international level. I hope that those stakeholders that take a great interest in — and express views on — how we run our business are also prepared to take the time to truly understand our mission, the considerations we need to balance and how the business de factor operates,” says Eva Halvarsson.

Key events during the year

  • During the year, the Fund developed a new sustainability strategy as well as revised investment beliefs which highlight sustainability. The Fund has also developed a new corporate governance strategy.
  • With the support of the changes to the legal rules for the AP Funds regarding exemplary fund management, the Fund divested from a total of about 60 tobacco companies and companies involved in the maintenance and modernisation of nuclear weapons systems in 2019.
  • In 2019, AP2 included climate risk into the Fund’s overarching return assumptions, and this serves as the basis for strategic portfolio decisions.
  • In 2019, AP2 increased the strategic weighting of green bonds from 1.0 to 3.0 per cent of the total portfolio.
  • For the second year in a row, AP2 published a report in the month of February in accordance with the framework of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD report is included in this year’s sustainability report.
  • Also in 2019, AP2 became one of the first investors in the world to publish a report on the Fund’s human rights work in accordance with the framework for the United Nation’s guiding principles.
  • The UN Principles for Responsible Investment (PRI) have included AP2 in its Leaders’ Group 2019. This group includes capital owners that PRI identifies as leading when it comes to selecting external managers for listed equity and/or private equity. AP2 has been named a leader in both these categories.
  • The carbon footprint of the Fund’s listed equity portfolio has shrunk by half in the space of two years.


The English version of AP2’s Sustainability Report 2019 will be available at www.ap2.se from beginning of March.

For more information, please contact:

Eva Halvarsson, CEO of AP2, +46 (0)31 704 29 00 or

Ulrika Danielson, Head of Communications and Corporate Governance, +46 (0)709 50 16 13.

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 381.3 billion (31 December 2019), and cover essentially all asset classes across the entire world. We are leading specialists on the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term, responsible, asset management company. www.ap2.se

Andra AP-fonden publishes Report on Human Rights

As one of the first investors in the world, Andra AP-fonden (AP2) is publishing a Report on its work with human rights, based on the United Nations’ Reporting Framework. The Report describes how the Fund addresses its responsibility to respect human rights and the processes it employs to make these rights integral to its business activities. As well as describing areas where the Fund has made important strides in developing its human rights efforts, the Report also highlights some of the challenges identified.

Since 2016, AP2 has worked systematically to enhance the integration of human rights issues in its investment decisions. In publishing this Report, the Fund intends to increase transparency regarding its efforts to implement the UN Guiding Principles on Business and Human Rights, as well as its achievements and challenges during this process.

“As early as 2016, we had already decided to support the ‘UN Guiding Principles Reporting Framework’. It is therefore highly pleasing that we are now able to publish our first report. We hope it will not only explain how we are working with human rights, but also contribute to a broader dialogue on human rights issues in the finance industry,” says CEO Eva Halvarsson, AP2.

“We are actively engaged in integrating sustainability issues, including human rights issues, as part of our asset management activities. Among other topics, the Report describes how the indices we have developed in-house feature a method for identifying companies involved in human rights controversies, enabling their subsequent exclusion from the index in question. Furthermore, through a close and active dialogue with our external asset managers in China, we ensure that sustainability issues, including human rights, are integrated into investment decisions,” explains Eva Halvarsson.

Using the UN Guiding Principles Reporting Framework helps the Fund to focus on the key issues, while also functioning as an internal instrument for identifying deficiencies and developing the process. The first part of the Report addresses the Fund’s commitment, governance and policies concerning human rights issues. Part two addresses the Fund’s perceptions regarding the human rights issues it faces, and the challenge involved in identifying which are the most salient. The third part highlights the Fund’s reactive and proactive management of two of the Fund’s salient cases of human rights infringements: the accidents at mining-company Vale’s tailings dams and issues related to agricultural investments in Brazil.
Read the Report

More about the UN Guiding Principles on Business and Human Rights at www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

For further details, please contact:
Ulrika Danielson, Head of Corporate Communications, on +46 709 50 16 13.

AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 367.4 billion (30 June 2019), within essentially all asset classes and across the entire world. We are leading specialists in the Swedish pension system and are a world-class asset manager. We are a global leader in integrating sustainability in our investments, for the benefit of the pension system. The Fund is a long-term and responsible asset manager. www.ap2.se

AP2 significantly increased its return

Andra AP-fonden (AP2) reported a total return of 10.7 (2.9) per cent, after costs, for the first half of 2019. The net result was SEK 35.6 (9.8) billion, while the Fund’s assets totalled SEK 367.4 (352.4) billion at the end of the first half of 2019. Relative to the benchmark index, the return was -0.4 per cent, excluding alternative investments and costs.

– AP2’s return exceeds the Fund’s long-term return assumption of 4.5 per cent annually. In the past ten years the Fund’s average annual real return has amounted to 8.1 per cent, says Eva Halvarsson, CEO at AP2.

– The beginning of 2019 saw a strong recovery in the world markets after the major downturn at the end of 2018. However, this was followed by growing concern that global real economic growth may lose momentum. This concern was amplified by uncertainties regarding Brexit and, in May and June, the escalating trade conflict between USA and China. This political uncertainty ems to have played a part in a declining investment climate the world over, says Eva Halvarsson.

In the first half of the year the Fund adjusted its listed portfolio to the recent years’ favourable growth in holdings of real estate and private equity funds by reducing the allocation to Swedish and foreign equities and Swedish bonds. In addition, the share of capital allocated to emerging-market bonds issued in US dollars increased. The Board also decided that the Fund shall no longer be invested in tobacco companies or companies that are involved in the maintenance and modernisation of nuclear weapons systems, says Eva Halvarsson.

Key ratios

Jan-June 2019Jan-June 2018Jan-Dec 2018
Fund capital carried forward, SEK billion367.4352.4334.8
Net result for the period, SEK billion35.69.8-4.3
Net outflows to the national pension system, SEK billion-3.0-3.3-6.8
Fund capital brought forward, SEK billion334.8345.9345.9
Asset management costs: operating expenses, %0.070.060.06
Asset management costs: commission expenses, %0.070.080.08
Total asset management costs, %0.140.140.14
Return after costs, %10.72.9-1.3
Real return after costs, %9.81.8-3.3
Annualised return after costs, 5.0 years, %7.69.56.9
Annualised return after costs, 10.0 years, %9.37.38.8
Real annualised return after costs, 10.0 years, %8.16.47.7

Read the Half-year report. (PDF document, 1,1 MB)

For further details, please contact:
Eva Halvarsson, CEO at AP2, on +46 31 704 29 00 or Ulrika Danielson, Head of Corporate Communications, on +46 709 50 16 13.

AP2’s Female Representation Index 2019 – slight increase in the proportion of women on board of companies

AP2’s Female Representation Index for 2019 shows that the proportion of women represented on the boards of companies listed on NASDAQ Stockholm continues to increase, albeit slowly, and is now at 34.0 (33.9) percent. The proportion of women in executive positions is also increasing and in this year’s survey it was 24.0 (23.2) percent. For the first time, more than 10 percent of listed companies have a female Chairman of the Board.

“This year’s Female Representation Index shows that the percentage of women on the boards of listed companies has increased by only 0.1 percentage point compared with last year. In the last five years the yearly increases have been greater. So, while this is the highest recorded level and the proportion continues to grow, I hope that this trend will not stagnate, as 34 percent is still too low,” says Eva Halvarsson, CEO of AP2.

“It is encouraging that the percentage of women board chairmen and CEOs is on the increase. For the first time, more than 10 percent of listed companies have a woman as board chairman (10.2%, increase from 8.8%). The proportion of female CEOs is 9.0% (increase from 8.4%),” she says.

“It is interesting to note that the nominating committees with women correlate favourably with boards with a higher proportion of women, while boards without nominating committees have a lower proportion of female board members than other companies,” she says.

On the board of primary-listed Large-cap companies, the proportion of women is 41.0 percent when the CEO is excluded from the board.

The percentage of companies with at least 25 percent women board members is increasing. Of the 332 companies in the survey, 254 have at least 25 percent women on the board.

Newly elected women on boards are younger than their male counterparts and female board members have on average a slightly higher number of board assignments than male members.

Background to AP2’s Female Representation Index
AP2 has since 2003 conducted an annual survey with Nordic Investor Services to determine the proportion of women at middle management level, in executive positions and on the boards of listed companies. The survey for 2019 covered 332 primary and secondary listed companies on NASDAQ Stockholm. In addition, the survey records the proportion of women who have graduated from study programmes that constitute the traditional recruitment base for management groups and boards.

For more information, please contact:

Eva Halvarsson, CEO, Andra AP-fonden (AP2), phone +46 (0)31 704 29 00
Ulrika Danielson, Head of Communications & HR, phone +46 (0)709 50 16 13

www.ap2.se

The figures refer to all companies listed on NASDAQ Stockholm, unless otherwise specified.

AP2 is one of the buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. AP2’s assets under management totalled SEK 334.8 billion (31 December 2018), in essentially all assets classes and across the whole world. AP2 is a long-term and responsible asset manager that has an important mission – to give Sweden’s current and future pensioners the best possible pensions by minimising the negative effect on pensions that would derive from applying the ‘brake’.

The Council on Ethics of the Swedish AP Funds Annual Report 2018: New issues in focus during 2018

For more than 10 years, the AP Funds’ Council on Ethics has exercised influence on the AP Funds’ global portfolio of listed companies to improve their environmental, human rights and corporate governance work through engagement and dialogue. During 2018, the engagement and efforts of the Council on Ethics have been directed at problem areas such as Facebook and human rights; the use of pesticides threatening the survival of bees; and the legalisation of cannabis in Canada and the emergence of listed cannabis companies. Other focus areas have been oil companies’ long-term climate work, deforestation in South America, and tailings dams in Brazil.

With social media and fast-growing companies, the world is rapidly changing. Facebook, for example, is facing challenges pertaining to user integrity and human rights. The Council on Ethics has initiated a dialogue with the company on this specific issue. Oil companies such as Shell face the challenge of adapting their products to address climate change. The company has recently adopted a new, public long-term goal to reduce the carbon footprint of sold products. The goal is that net emissions over the entire life cycle from the energy products sold will halve by 2050 and decrease by 20 per cent by 2035.

During 2018, the Council on Ethics participated in the preparatory work related to the AP Funds’ new legislation, which includes revised investment guidelines as well as a new, ambitious sustainability goal. The legislation came into force in January 2019. It aims higher with regard to sustainability than the earlier regulations set in 2000. For the Council on Ethics, the working model will still be based on engagement and dialogue with a view to persuading companies to act in a more responsible way. This model is based on the conventions ratified by Sweden and has been applied by the AP Funds since 2007. The Council will continue to work to it when recommending the exclusion of a company.

John Howchin, Secretary General of the Council on Ethics of the Swedish National Pension Funds, says: “The wording in the old legislation – that the AP Funds ‘should take into account environmental and ethical considerations’ with regard to their investments – was indeed wise and ahead of its time. It offered the AP Funds guidance as well as the freedom to integrate and continuously develop their sustainability work, both in terms of their investment strategies and their ways of working. It also played its part in the establishment of the Council. This happened during a period of very rapid development and change in terms of the way society and the financial markets viewed sustainability. Today, 20 years later, almost all leading asset owners and managers are working with some form of sustainability strategy in place. With the revised legislation, the AP Funds and the Council on Ethics will have an even more powerful mandate regarding sustainability, and we will take that into account.”

Read more about the Council on Ethics’ company dialogues and other commitments in the Annual Report 2018.


For more information, please contact:

Ossian Ekdahl, Chairman of the Council on Ethics of the AP Funds, telephone: +46 8 566 20 200 ossian.ekdahl@ap1.se
John Howchin, Generalsekreterare AP-fondernas etikråd, +46 8 555 17 176, John.Howchin@ethicalcouncil.com

The Council on Ethics has been assigned by the AP Funds to create high long-term returns with low risk for current and future retirees, all based on one common core value: to take a proactive approach to sustainable development, and to demand and act in the name of transparency and positive change. The Council on Ethics works proactively as well as reactively, engaging with the AP Funds’ global portfolio of companies. The starting point is that well-managed and responsible companies create higher long-term returns with lower risk. The aim of the Council is to ensure that companies and industries conduct their sustainability work in a systematic, structured and transparent way.