AP funds coordinate ethics activities and set up a joint Ethical Council

Through the formation of an Ethical Council, Sweden’s national pension buffer
funds, AP1, AP2, AP3 and AP4, have coordinated their SRI analysis of
environmental and ethical compliance in the foreign companies where the funds
have holdings. The collaboration will involve monitoring of the funds’ investment
portfolios with regard to violation of international conventions, analysis and
dialogue with the portfolio companies. This collaboration does not extend to
Swedish companies, for which the respective AP funds will continue to conduct
their own dialogues and analyses.

In a recent procurement of consulting services for ethical and environmental analysis, the
four AP funds* all chose the same supplier, GES Investment Services. The funds’
collaboration will be based on a systematic screening of their investment portfolios in order
to identify and examine possible infringement of international norms and conventions, an
analysis for which GES has been given responsibility. In addition, GES will support the
funds with assistance in individual dialogues, analyses, advice and coordination of the
Ethical Council’s activities.

A total of around 3,500 companies will be reviewed, which, based on earlier experience,
typically leads to the identification of some twenty candidates for more in-depth
assessment. Every year, the ambition is to conduct an active dialogue with around ten
companies that can be associated with infringement of international conventions in areas
related to the environment, human rights and labour rights. Coordination of the AP funds’
activities will give international investors a powerful partner in Sweden with an active
commitment to the ethical and environmental aspects of corporate social responsibility.

“Within the framework of our common mission, we see good opportunities to cooperate
in this area. By joining forces we will enable us to avoid redundant efforts and concentrate
our resources on the most urgent areas for improvement,” says AP1’s Nadine Viel
Lamare, who will be the Ethical Council’s first Chairman.

“Together the funds have net assets under management of around SEK 800 billion, which
in itself provides greater scope to influence individual companies than if each fund were to
act independently, and we will also be able to conduct more parallel discussions.
Furthermore, by coordinating our activities we will facilitate collaboration with other
international stakeholders who are actively committed to ethical and environmental
compliance,” she adds.

AP1 has previously cooperated with other investors in a number of successful dialogues
with multinational corporations which have changed their routines and policies in response
to pressure from the Fund. Most recently, the US-based Marriott hotel chain was persuaded to revise its human rights policies with a focus on combating child sex tourism.

The Ethical Council’s is made up of one representative from each of the AP funds.
Chairmanship of the Ethical Council, which is initially held by AP1’s representative Nadine
Viel Lamare, will be alternated between the funds.

Decisions to exclude companies from the investment portfolio will be made by the
individual funds.


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