AP3’s sustainability process
Offers support when making difficult decisions
As a major investor, AP3 has the opportunity to influence developments in a sustainable direction. To exert the greatest impact, sustainability work must be focused where AP3 can make the biggest difference and generate the most value for the state income pension system.
Sustainability process
To support the difficult decisions that sometimes need to be made, AP3 has a clear process that draws on the fund’s collective access to resources, including external partnerships. The work must be result-oriented, based on clear objectives and through effective advocacy. The sustainability process consists of clear steps that support each other and involve the entire management organisation.
AP3’s working method is well anchored in the board and in our sustainability- and ownership policy. The CEO is responsible for implementing the policy and does this in close collaboration with asset management. In practice, this is expressed through a CEO instruction. The ongoing sustainability work is discussed and decided upon by an investment committee and by the Portfolio Strategy and Sustainability group, together with the various portfolio management teams.
Sustainability framework with minimum requirements
AP3’s ambition is to fulfill its mission as a responsible owner through active ownership management. This means that the fund also invests in companies and sectors with significant sustainability challenges. However, this does not mean that AP3 can or wants to be invested in all companies, especially companies whose operations are not sustainable or do not develop in a sustainable direction at all.
AP3 does not invest in all companies
For AP3 to invest in a company, there must be a clear ambition to act long‑term and to integrate sustainability considerations into the business.
Not all companies meet these requirements. The fund avoids companies whose operations are not considered sustainable in the long run, or that are developing in a negative direction.
AP3 regularly reviews its entire portfolio and continuously assesses which companies, based on sustainability‑related grounds, should not be included. AP3 does not invest in:
companies ranked among the lowest in sustainability within AP3’s investment universe.
companies that systematically and extensively violate international conventions on the environment, human rights, labour rights, or anti‑corruption.
companies that receive a significant share of their revenues from the production, processing, distribution, marketing, or sale of cannabis or tobacco.
companies involved in the production of anti‑personnel mines or cluster munitions
companies participating in nuclear weapons programs in countries not covered by the Non‑Proliferation Treaty (NPT)
companies engaged in coal extraction or coal‑based energy production
companies with high CO₂ emissions that lack long‑term climate targets
In addition to these criteria, AP3 continuously reviews how companies manage their most material sustainability risks.
See also the AP Funds’ Council on Ethics’ overarching positions.
The Council develops overarching position statements when needed to clarify the AP Funds’ standpoint on certain sustainability issues.
The sustainability work is subject to goals
Setting goals that are followed up is an important part of achieving clear results and integrating sustainability work in the portfolio. The goals vary in nature depending on the focus area and may be both quantitative and qualitative.
Sustainability risks and opportunities
AP3 focuses its sustainability work where risks and opportunities are deemed material and where AP3 has opportunities to make a difference. The fund identifies which sustainability risks have the greatest impact on sustainable development and which are deemed to have the greatest impact on AP3’s investments.
Proactive governance – locally and globally
AP3’s exercised stewardship work varies depending on what the ownership looks like. The fund conducts corporate governance based on the conviction that well-managed companies create shareholder value and contribute to sustainable societal development. Being a committed and responsible owner means exercising our voice at general meetings, having dialogues with the companies and participating with other owners and other stakeholders in various national and international initiatives and contexts that promote good corporate governance and sustainable development.
Results
The outcome of AP3's sustainability process is clearly reported with the aim of being result-oriented and able to be evaluated. As part of the mission to act as a role model in institutional asset management, AP3 together with other AP-funds develop common guidelines for how the results in the area of sustainability should be reported.
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As the Third Swedish National Pension Fund AP3 is guided by the international conventions and guidelines ratified and supported by the Swedish Parliament. Examples include the UNFCCC with the Paris Agreement, the Convention on Biological Diversity and Agenda 2030.
AP3’s sustainability work is the basis for long-term value creation and should create value for the state income pension system and contribute to a sustainable development within the framework of its mission.
AP3’s policy for responsible investments describes the overall framework for AP3’s work with sustainability and ownership governance.