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.
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 in an investment committee and in the group for sustainability and ownership governance together with the various management groups.
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
A basic condition for AP3 to invest in a company is that there are ambitions to act long-term and integrate sustainability aspects into the business. To make the best use of AP3’s resources, the lowest sustainability-rated companies are therefore screened out of AP3’s investment universe.
AP3s also do not invest in:
- companies that systematically and extensively violate international conventions regarding the environment, human rights, labor law and corruption
- companies that derive a significant part of their annual revenue from the manufacture, production, processing, distribution, marketing or sale of cannabis or tobacco
- companies involved in the manufacture of nuclear weapons, cluster bombs or anti-personnel landmines
- company involved in the extraction of coal or coal-based energy production. See also AP-funds council’ on ethics’ position for further clarification at etikradet.se.
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.
Utfallet av AP3s hållbarhetsprocess ska redovisas tydligt med syfte att vara resultatorienterat och att kunna utvärderas. Som ett led i uppdraget att agera föredöme inom institutionell kapitalförvaltning tar AP3 tillsammans med övriga AP-fonder fram gemensamma riktlinjer för hur resultaten inom hållbarhetsområdet ska redovisas.
Engagement generates added value. Well run companies deliver higher returns at a lower level of risk over time. AP3 sets out to make a difference through engagement, action and pressure for change. […]
The governance view of sustainability
AP3 has strong reasons for promoting a sustainable development because it is a prerequisite for achieving high investment returns over time. […]
AP3 is currently working with the following four focus areas: Corporate governance, Climate, Human rights and Biodiversity. […]