AP4 is constantly working to address risks and opportunities in management, including those arising from sustainability (environment, ethics and governance). Including sustainability in investment analyses is a necessity to conduct successful long-term management. This belief is reflected in AP4's asset allocation, business philosophy and strategies and the management works continuously to develop and invest in different strategies when they meet AP4's criteria for sustainability and profitability.
Focus areas in sustainability
AP4 chose these focus areas because:
- they are considered to be important for return and the performance of all assets.
- AP4’s knowledge, commitment and potential for impact can make a difference and have a positive influence on return on assets over the long term.
Organization and responsibility for sustainability in management
Each year AP4’s Board of Directors adopts an ownership policy that summarizes the guidelines for corporate governance in Swedish and foreign companies. The CEO leads sustainability initiatives and delegates responsibility for integration of sustainability to the head of each management unit, who reports to the Chief Investment Officer and the CEO about the work. The corporate governance unit reports directly to the CEO and also supports integration of sustainability into management units. AP4’s representatives on the Ethical Council of the AP Funds work in the corporate governance unit.
Guiding principles of AP4's ownership
- AP4’s core values, which are based on the Fundamental values of the Swedish state and international conventions. Read more
- AP4’s ownership policy Read more
- Swedish Corporate Governance Code (the Code) Read more
- Principles for Responsible Investment (PRI), a United Nations initiative for responsible investments. Read more
- United Nations Global Compact Read more
- OECD Guidelines for Multinational Enterprises Read more
- ILO fundamental rights conventions Read more
AP4's ongoing sustainability initiatives include work with dialogues and AP4's focus areas as well as the focus areas and initiatives pursued by the Council on Ethics of the AP Funds. These issues include anti-corruption, human rights, labour rights, health and saftey, pollution, biodiversity etc., in foreign companies.
Better data - a condition for success
Greater transparancy and qualitative data from the companies allows for more detailed quantitative strategies and indentifies companies with sustainable development. The difficulty often lies in finding information with a high relevance for quantitative comparisons of various sustainability elements over a global market.
AP4 has continuous contact with international investment banks and independent analysts that has a dedicated sustainability focus. These contacts are a natural part of the work with the administration and in the search for appropriate mandates. AP4 also follows academic research. Individual studies show interesting relationships between sustainability factors and the company's key ratios, which can be the basis for AP4 establishing more mandates with sustainability focus.