AP2 expects external managers to have processes in line with the UN Guiding Principles and the UN Global Compact. The Fund expects all external managers to describe their human rights processes and long term goals, which can then be measured over time. If the Fund considers that an external manager does not live up to expectations and that its long term goals are not in line with the principles above, the dialogue is escalated. Divestment may be relevant in the event of a negative trend where the external manager shows unwillingness or inability to adapt.

• External managers must have a human rights policy or other governing document that regulates human rights issues. 

• External managers must act in line with the UN Guiding Principles for Business and Human rights, alternatively the principles of UN Global Compact or the OECD’s Guidelines for multinational companies, as well as how the spirit of these must be maintained within the company and with their portfolio companies.

• External managers must formulate how their policies and processes lead to the payment of a living wage within the portfolio companies and their supply chains.* 

• External managers must describe how their policies or processes contribute to portfolio companies having a well-functioning grievance mechanism. 

• External managers should describe how their policies or processes contribute to the portfolio companies having a well-functioning remediation process. 

• External managers shall promote freedom of association and collective bargaining among its portfolio companies. 

• These sub-goals/policies shall be anchored in the relevant company boards. 

* This is not presented as a requirement at present, but dialogues with external managers include the concept and how the company works with the issue in the long term.