AP2’s mission as a buffer fund is to contribute over the long-term, with its return, to balance in the pension system, thereby ensuring a good pension trend, even during periods of economic and demographic fluctuations.
The AP Funds are required by law to manage their fund assets in a way that provides the greatest possible benefit for the insurance of income-based old-age pensions. The total risk level should be low, measured in outgoing pensions.
The mission of the Funds requires the fund assets to be managed in an exemplary manner through responsible investments and responsible ownership. Special emphasis must be given to how sustainable development can be promoted without compromising on the overall goal. Exemplary means that the investments should have the best risk and return, given the needs of the pension system, and that sustainability should be an integral part of the asset management.
Andra AP-fonden’s definition of sustainability
AP2’s sustainability work is based on the Fund’s mission and involves acting over the long term to protect and add value to the Fund’s invested assets – based on an economic, environmental and social perspective.
AP2 has defined long-term objectives to set the direction for the Fund’s work in each focus area: climate, biodiversity, human rights, diversity, equality and inclusion, as well as corporate governance. Goals broken down into long-term and short-term goals for each focus area, and activities for achieving the goals, are specified in a strategy and annual action plans for each focus area.
|Climate||Biodiversity||Human Rights||Diversity, equity |
|Net zero greenhouse gas emissions by 2045.||Contribute to a positive net impact on nature by 2030.||Implementation of the UN Guiding Principles on Business and Human Rights by 2025.||On average, the Fund’s listed holdings must have at least 40 per cent of each gender represented on the board by 2030.||Active and responsible ownership through an increased number of dialogues with and voting in all of the Fund’s listed shareholdings by 2027.|
|Greenhouse gas emissions of -55 per cent by 2030 (base year 2019).||A portfolio that does not contribute to illegal deforestation by 2025.||The Fund must have actively influenced the portfolio companies to have a strategy for diversity, equity and inclusion.|
|All asset classes in line with the Paris Agreement by 2025.|
AP2’s sustainability policy is based on the core values and positions of the Swedish state, as well as the AP Funds’ shared core values. The Sustainability Policy sets the overall framework for the Fund’s sustainability work. It is implemented through the Fund’s sustainability strategy and action plans for each focus area.
AP2’s sustainability work adheres to a method that consists of six parts. These form the basis for the strategies describing the work that the Fund undertakes within each focus area. The method answers the question of “how” this work is conducted through responsible investments and responsible ownership.
AP2’s method of working with sustainability
Sustainability is integrated throughout the organisation, in asset management and in the Fund’s day-to-day work.
AP2 focuses its work on the issues that are most important and where the Fund can make the greatest difference.
Sustainability work is based on solid, fact-based analysis, both before an investment and in the role of owner.
AP2 influences companies to fulfil the Fund’s expectations in sustainability issues.
The Fund can achieve more through collaboration, both internally and with other investors.
AP2 walks the talk and builds trust through transparency.
The most significant risks to which the Fund may be exposed can be divided into financial, operational and impact risks. Sustainability risks can generally be seen to affect all of these risks. Impact risks include the risk that an investment might be detrimental to people or the environment. Examples of impact risks related to people are human rights violations, corruption and bribery. Examples of impact risks associated with the environment are illegal deforestation, greenhouse gas emissions and dumping of environmentally hazardous waste. The purpose of identifying impact risks is to manage the risks, i.e. that the Fund has processes to avoid the risks it does not want in the portfolio and to use engagement to seek to reduce the risks identified in the portfolio.
Organisation and distribution of responsibility
AP2’s Board determines guidelines and policies in governance issues and has mandated the CEO of the Fund to manage these in the ongoing operations of the Fund. The Fund’s Executive Management, together with the head of the strategy department and the Fund’s senior sustainability analyst, are responsible for the strategic sustainability work and for implementation and follow-up. The day-to-day work is handled by the Fund’s various departments.
Day-to-day corporate governance is managed through the Fund’s Corporate Governance Group, which comprises members of the Fund’s Executive Management, a corporate governance analyst and the head of Swedish Equities. Based on the Fund’s corporate governance strategy, the Corporate Governance Group prepares action plans and continuously monitors the work.
At each Board meeting, AP2’s Board receives a report on the Fund’s sustainability and corporate governance work. A special sustainability theme is also presented and discussed at each board meeting.