Initially AP4 invested only in Swedish equities, but over the years its investments have successively been broadened. Today AP4 invests in listed equities as well as in fixed income securities and unlisted assets, both in Sweden and abroad. We formulate our own goals and strategies, and by law our board and operations may not be governed by government directives or by business policy or economic policy interests.
A forced to be reckoned with
Over time our asset management has made a major contribution to Sweden’s public pension system. When AP4 was established in 1974, its mandate was to invest in Swedish equities. At the time, ownership of equities was not as common as today, neither among institutional investors such as pension funds nor among private persons. The decision to establish an AP Fund to invest in Swedish equities was therefore questioned at the time, but it subsequently proved to be a wise decision. Over time AP4 has contributed a surplus of SEK 576 billion in support of the pension system. At the same time, AP4 has been a source of equity capital not least for listed Swedish companies and a contributing force in the work on establishing rules for ethics and conduct in the Swedish stock market. A favourable return on the fund capital contributes to a strengthening of the pension system and allows promised pensions to be paid out.
The world we work in
Engaging in a dialogue with the AP Funds’ stakeholders provides guidance to the Funds in their sustainability work and a clearer picture of stakeholders’ views of the AP Funds’ mission and operations in relation to sustainability and returns. Every three years the AP Funds conduct a stakeholder dialogue and materiality analysis. The last time this was done was in autumn 2020, and due to the prevailing pandemic at the time, it was conducted in the form of a web-based survey that was sent to representatives from AP4’s various stakeholder groups.
Our most important stakeholder groups are:
- Portfolio companies
- Industry peers
- Society in general
- Interest organisations
Overall the survey showed that the stakeholders have relatively good awareness about the AP Funds’ operations and are highly confident that we are living up to our mission to deliver long-term returns through responsible asset management, They also have high confidence in our work with, and integration of, sustainability matters in our asset management. The stakeholder groups also noted the importance that the AP Funds advocate for the climate transition in Sweden and internationally.
We are addressing this through our efforts to achieve the highest possible return over the long term and manage the fund capital in an exemplary way through responsible investments and responsible ownership.
To do this we need to understand and manage sustainability risks and opportunities in the portfolio, such as climate change. All our employees contribute to this mission through their expertise and commitment, with values that increase learning and promote professionalism in their relations with partners and other stakeholders.
This is how we illustrate the process: