AP4 increases sustainability ambitions – divests from nuclear weapons and oil sand

AP4 has long experience in integrating sustainability in its asset management operations. AP4 is at the forefront internationally and was recently ranked as the leading pension fund internationally when it comes to addressing climate change in asset management. AP4 is of the view that by taking responsibility as owner and by lowering the climate risk in the portfolio, AP4 can contribute to higher long-term sustainable returns.

Effective from January 1, 2019, new investment guidelines were implemented for the AP Funds. The new guidelines imply a higher ambition level regarding sustainability. It is now stated in the law that the asset management operations are to be conducted exemplary by responsible investments and responsible ownership. When managing funds, special emphasis must be given to how a sustainable development can be promoted without compromising on the overall return objective.

AP4 has previously decided not to invest in companies involved in the production of tobacco, mines, cluster weapons, cannabis or companies where 20 percent or more of turnover relates to thermal coal.

AP4 now increases its ambitions within sustainability based on the new law regarding exemplary asset management and has decided to divest from companies related to nuclear weapons and oil sand.

  • Nuclear weapons. AP4 is of the view that an exemplary interpretation of the Non-Proliferation Treaty supports the decision not to invest in companies involved in nuclear weapons. AP4 assesses that the current upgrades and modernizations of nuclear weapon systems are not aligned with the intention of long-term disarmament as expressed in the Non-Proliferation Treaty.
  • Oil sand. AP4 is of the view that it is exemplary and commercial to contribute to a transition to a low carbon economy. Therefore, AP4 has decided not to invest in companies where oil sand represents 20 percent or more of turnover. Oil sand is a high carbon intensity fossil energy source. For that reason, AP4 assesses that oil sand must be phased out in a global transition to a low carbon economy in line with the UN Climate Convention and the Paris Agreement. The decision is a development of AP4’s business strategy to reduce climate risk exposure of the portfolio. Since 2012 AP4 has invested in low-carbon strategies in equities. These strategies reduce exposure to companies with large carbon dioxide emissions and fossil reserves. Also, AP4 does not invest in companies where thermal coal represent 20 percent or more of turnover.

”We welcome that sustainability is now implemented in the law with the clarification that asset management shall be conducted exemplary by responsible investments and responsible ownership. AP4 is one of the leading pension funds when it comes to sustainable asset management and our ambition is to remain at the forefront. We have now decided to increase our ambitions and divest from companies related to nuclear weapons and oil sand”, comments Niklas Ekvall, CEO of AP4.

 

Contact:
Tobias Fransson
Head of Strategy & Sustainability
Tel: +468-787 75 28
Email: tobias.fransson@ap4.se

Published Wednesday, January 16, 2019