Climate and the Environment and Corporate Governance

Sustainability affects us and our world. Our integration of sustainability into investment assessments is necessary to achieve the goal of the highest possible long-term return. AP4 is an active owner who takes responsibility, influences and establishes the prerequisites for long-term sustainable value creation in the companies invested in. This contributes to safeguarding pensions, better long-term economic growth and a more sustainable society.

Below is a summary of some of the work accomplished during the first six months of the year.

  • Climate and the Environment is a focus area within sustainability. During the first half of the year, AP4 conducted a review of its investment processes and established a framework to further increase the integration of sustainability into the management. The focus areas Climate and the Environment and Corporate Governance are considered to be essential to AP4’s returns, risk management and value growth of all assets.
  • Reduced climate risks in the portfolio by increasing investments in low-carbon strategies, by reducing exposure to companies with the relatively greatest emissions and/or fossil reserves. At the end of the first six months of the year, investments in low-carbon strategies had increased to 27 percent of the global equity portfolio. The goal is to continuously increase this proportion, and by the end of the year will reach 30 percent.
  • AP4 continues to participate in green bond issues, which finances green projects. AP4 also remains active in the secondary market for green bonds, which is important for promoting the growth of a sound and competitive market.
  • AP4 participated in the nominating committees of 22 Swedish listed companies, including as chair for three.
  • The percentage of women on the boards of listed companies is increasing - a mission AP4 has been driving for many years. In the nominating committees where AP4 participated, 14 of 27 newly elected members were women, which corresponds to 52 percent of newly elected female members.
  • AP4 conducted more than 25 dialogues with Swedish companies prior to the Annual General Meetings (AGM) during the Spring, which resulted in several cases of more reasonable terms to meeting proposals and improved disclosures by the companies. In addition, AP4’s management has been in constant dialogue with more than 125 Swedish companies during the period. The dialogues focus on company operations, risks and business opportunities, including sustainability aspects.
  • AP4 voted at 56 AGMs and 770 AGMs.
  • The Council on Ethics of the AP Funds, a successful collaboration between AP1-AP4, celebrates its 10th anniversary during 2017. During the Spring 2017 the Ethical Council organized two well-attended commemorative seminars on the topic of responsible and sustainable investment:
    • Regarding climate change with two distinguished speakers, Al Gore and Johan Rockström;
    • Regarding responsible Investors, Human Rights and the Environment.

The Council on Ethics of the AP Funds works to, among other things, influence foreign companies to positive change in sustainability and increased transparency.

  • The Council on Ethics of the AP Funds Annual Report 2016 - human rights in continued focus – was published in the Spring 2017.

 

Read more at www.etikradet.se or at www.ap4.se.