AP2 is both a member and sponsor of various Swedish and international initiatives in the fields of sustainability, ethics and corporate governance. Below are some examples.
UNGPRF (UN Guiding Principles Reporting Framework)
AP2 supports the UN Guiding Principles Reporting Framework, which provides a set of questions, to which any company should strive to have answers in order to know and show that it is meeting its responsibility to respect human rights in practice. Increasing companies transparency regarding their human rights work is appreciated, as it can help AP2 to make more well-informed investment decisions. The Reporting Framework is used internally at AP2 as a tool for developing AP2’s own human rights work and for guidance when reporting publicly on the issues.
ACGA (Asia Corporate Governance Association)
ACGA is an independent, non-profit membership organisation dedicated to working with investors, companies and regulators in the implementation of effective corporate governance practices throughout Asia. ACGA was founded in 1999 from a belief that corporate governance is fundamental to the long-term development of Asian economies and capital markets.
EITI (Extractive Industries Transparency Initiative)
The EITI is an initiative sponsored by the extractive industries, especially oil companies. The need for transparent reporting and control is particularly important in countries that are rich in natural resources, but led by weak governments. More transparent reporting by the companies about what they pay and the governments of the host countries about the size of the revenues generated by the oil, gas and mining industries increases transparency within society and improves the prospects for economic control. In partnership with other international investors, the Fund supports EITI, sending a signal to countries and companies that are engaged in extractive operations that the shareholders place a value on the clear and open reporting.
WIN WIN Gothenburg Sustainability Award
AP2 sponsors WIN WIN Gothenburg Sustainability Award (former Gothenburg Award for Sustainable Development), which is an important part of the Fund’s profile within the field of sustainability. The international award is given in recognition of achievements in sustainable development and was awarded for the first time in the autumn of 2000, at which time it was known as the Gothenburg International Environment Award. An independent jury selects the award winners within the various Award criteria. Award winners have ranged from environmental branding organisations and cooperatives to politicians and corporate executives. The Award is presented in association with Gothenburg City and several other sponsors, one of which is the Second AP Fund. www.winwingothenburgaward.com
Sustainable Value Creation Initiative
In autumn 2009, AP2 joined up with fourteen other Swedish institutional investors to establish the Sustainable Value Creation Initiative, with the aim of encouraging Swedish publicly quoted companies to adopt a sustainable business approach and create long-term value. The Fund’s main reason for participating in this initiative is a belief in the importance of encouraging Swedish companies to actively manage the environmental and social impact of their business operations, with a view to managing risks and costs, as well as exploiting the potential business opportunities. The investors behind this initiative were presented with the 2010 Financial Hearings Award for Årets Samspel, an award shared with Capital Market Day in Shanghai.
ICGN (International Corporate Governance Network)
ICGN is a global network that focuses on corporate governance issues. ICGN is committed to ensuring that shareholders acquire enhanced rights to exercise their votes at AGMs and gain a stronger position with respect to corporate executive managements. ICGN drives development in the corporate governance field by formulating recommendations about responsible governance. ICGN also promotes a broader interface and exchange of knowledge between countries and investors. AP2 endorse the ICGN Global Stewartship Principles.
IIGCC (Institutional Investors Group on Climate Change)
IIGCC is a forum for European investors on climate issues. The Group is committed to voicing investors’ views on climate issues and to helping companies, government agencies and fellow investors appreciate the long-term risks and opportunities associated with climate change. The climate issue is of crucial importance to the Second AP Fund as a long-term investor. Currently, there is considerable uncertainty about future regulations and the framework envisaged for cutting greenhouse emissions and stimulating alternative sources of energy. This makes it difficult for companies to invest profitably and for investors to predict risk and return. IIGCC provides an efficient platform for promoting investors’ wishes concerning the climate issue. It is also a good way for the Fund to stay abreast of the latest information on various climate-related investments.
IÄF (Institutionella ägares förening)
Institutionella ägares förening (the Institutional Investors’ Association) for regulatory issues in the stock market is a collaborative venture that includes the AP Funds, insurance companies and bank-related funds. The institutional investors’ association was formed to facilitate cooperation on the development of best practice in corporate governance and to influence the development of the Swedish Corporate Governance Code and other guidelines. It is vital work that influences the development of and confidence in the Swedish stock market and publicly quoted companies.
SWESIF (Swedish Forum for Sustainable Investment)
SWESIF is an independent networking forum for organisations working to promote or engaged in sustainable investment in Sweden. SWESIF aims to increase awareness of and interest in sustainable investment among institutional investors and asset managers. Sustainable investment embraces investment that, as well as financial factors, incorporates factors such as the environment, social responsibility and corporate governance, or other global factors, in the investment process. SWESIF’s aim is to see that sustainable investment becomes an established item on the agendas of decision-makers in politics, industry and the financial market, and to ensure that sustainable investment is awarded general recognition. SWESIF is committed to an exchange of the latest information, ideas and expertise, while also promoting increased networking and cooperation between members and other interested parties.
PRI (Principles for Responsible Investment)
A global initiative for institutional investors, the United Nations’ Principles for Responsible Investment were launched in 2006. The idea was to encourage investors to address ESG (Environmental, Social and Governance) issues in their investment decisions and, when exercising their ownership rights, to thereby create value on behalf of their beneficiaries. The signing of these Principles by AP2 should be seen as a declaration of its support of the PRI, and of its intention to observe these Principles within the broader framework of its assignment. The Fund believes that environmental and ethical issues form a crucial part of the investment process. Furthermore, the PRI also help to drive development in the ESG field and contribute to an exchange of expertise on ESG issues, while improving contact between responsible investors worldwide. Within the general framework of the PRI, the Fund has participated in a project with a number of private equity companies on the joint development of improved principles for dealing with ethical and environmental issues associated with investment in and ownership of companies.
AP2’2s responses to PRI’s questionnaire 2016. (PDF document, 1,6 MB)
Mitt Liv is a social enterprise working to increase diversity and integration on the Swedish labor market. The company was founded in Gothenburg in 2008 by Sofia Appelgren, and was developed in 2009 to become a social enterprise. It is a social enterprise that generates its own revenues and grow its own power. Mitt Liv is religiously and politically independent. The core business, Chance of a lifetime, is a course and mentoring programs for people with a foreign background who are without work equivalent qualification and professional contacts and networks. The program is free to participants and funded by partnerships (businesses and organizations), which recognized the value and benefits of increased diversity in the workplace. In addition to mentoring programs offered lectures, training, counseling, networking meetings for partners and organizations that want to work with issues of diversity and development.
In November 2015, AP2 signed the Montreal Pledge, which means that the Fund commits to measure and publicly disclose the carbon footprint of their investment portfolios on an annual basis.
CICERO (the Center for International Climate and Environmental Research – Oslo) is Norway’s premier research institute in interdisciplinary climate research. Since 2008, among its many activities, CICERO has conducted independent assessments of green bonds. In 2016, the Center formed CICERO Climate Finance, which has been established to support investors with expertise about climate-related risks and to demonstrate how investors can utilise this knowledge in their decision-making processes. The starting point is current climate research and the work is conducted in close collaboration with the financial sector. An advisory board will be responsible for overseeing the quality of this research and will contribute its expertise on specific subjects. The Fund’s head of fixed-income securities is part of this panel, with other representatives from several of the world’s largest investors as well as leading ‘green’ financial players. More about the work of the Center at www.cicero.uio.no/en
TCFD (Task Force on Climate-related Financial Disclosures)
AP2 supports the recommendation on climate related disclosure from the Task Force on Climate-related Financial Disclosures (TCFD) released on June 2017. AP2 is very positive towards the TCFD framework as it will increase corporate transparency and hopefully provide the information asset owners and asset managers need in order to assess both climate risks and opportunities. The framework is also an important tool for AP2 to describe and communicate its own work with regard to climate. Read more here www.fsb-tcfd.org.
Read more about memberships and initiatives and the commitments AP2 has in the Fund’s Sustainability Report under the heading “Engagement”.