AP3 supports the UN Sustainable Development Goals
In September 2015, the 193 member states of the United Nations approved 17 global goals for sustainable and fair development by 2030. The goals, which replace the eight Millennium Goals, seek to abolish extreme poverty, to reduce inequality and injustice and to solve the global climate crisis. Reaching the goals requires governments, civil society and businesses to work together.
In 2016, leading global institutional investors attended the annual PRI conference to agree a shared definition of sustainable development investments as a means to support the Global Goals and to encourage other large institutional investors to take similar action. Afterwards, AP3 and the other Swedish AP funds joined some of Europe’s largest pension funds in signing a statement stressing the importance of institutional investors investing in solutions that promote the Sustainable Development Goals. AP3 is a member of Swedish Investors for Sustainable Development, a platform for learning and sharing information about Agenda 2030 for long-term Swedish investors and financial sector actors.
From words to action
Below we describe the key areas in which AP3 can make a difference and where we have the greatest ability to drive change on behalf of the Sustainable Development Goals. For example, in 2016 AP3 signed the Paris Green Bond Statement along with a large number of other global bond market investors to promote green bond issues as a route to financing the transition that climate change necessitates.
Goal 5: Gender equality
An equal society without discrimination is a prerequisite for AP3. That is why the Fund works to ensure a more even gender balance on corporate boards.
Goal 6: Clean water and sanitation
AP3 has invested in water infrastructure, particularly in water supply and water treatment, and is working with other investors to create further investment opportunities in the water sector.
Goal 7: Affordable and clean energy
Solar power is becoming an increasingly significant energy source for real estate companies. Take-up of this technology is increasing as it develops and becomes more efficient. Vasakronan, owned by the AP funds, is one company championing this trend. AP3 also invests in private equity funds and listed companies specialising in sustainability and renewable energy. In 2020 Polhem Infra invested in one of Sweden’s largest wind power projects. The 35 turbines at the Skaftåsen plant in the province of Härjedalen will generate around 535 GWh of electricity – equal to the consumption of 100,000 homes – when commissioned in 2021.
Goal 8: Decent work and economic growth
Labour practices and health and safety are important issues that AP3 prioritises. The Fund engages with investees to combat unsafe working conditions, workplace accidents, discrimination and child labour. The Council on Ethics of the Swedish AP Funds operates a project with the Danish Institute for Human Rights to influence large technology companies. In 2020 this initiative focused on engagement with Facebook and Twitter on personal data security.
Goal 9: Industry, innovation and infrastructure
Modern and effective infrastructure promotes economic growth and development. AP3’s investments and corporate stewardship contribute to increased efficiency in resource use, higher production capacity, innovation and flexible solutions in a changing world. In 2019 AP3 partnered with AP1 and AP4 to establish Polhem Infra, an investment company that invests directly in unlisted companies that operate or provide products and services in renewable energy production, energy storage and distribution, and digital infrastructure.
Goal 11: Sustainable cities and communities
AP3’s large investment holdings and active stewardship make the Fund a strong advocate of sustainable practices. Real estate investee Vasakronan is a leader in energy-saving and efficient offices and a role model for the Fund’s other property companies. During the year Hemsö launched a construction project that will integrate resource efficiency and social sustainability aspects. The Fund’s other real estate investees – Trophi, Regio and Trenum – are committed to resource efficiency and social responsibility.
Goal 12: Responsible consumption and production
AP3 owns 150,000 hectares of timberland, 90% of which is environmentally certified. The timber is used primarily for building material, furniture and to manufacture paper products.
Goal 13: Climate action
The AP3 portfolio helps to combat climate change through substantial investments in timberland and green bonds. Evaluating an investee’s climate impact is closely integrated into the investment process. AP3 is committed to halving its carbon footprint between 2019 and 2025. The primary means involve engaging with investee companies to encourage them to reduce their climate impact and reviewing the portfolio’s composition and exposure to fossil fuels.
Goal 15: Life on land
Sustainable forests are good for the climate. AP3 owns 150,000 hectares of production forest that is sustainably managed and has set aside 18,900 hectares for nature conservation.
Goal 16: Peace, justice and strong institutions
Tackling financial crime, anticorruption and money laundering is a key pillar of the Fund’s corporate governance. The aim is to prevent financial damage to investee companies and investors and to minimise the risk of loss of public confidence in the financial markets.
Goal 17: Partnership for the goals
Collaboration and partnerships are important for a pension fund like AP3. The Fund is involved in climate-related initiatives including the Climate Action 100+, the Task Force on Climate-related Financial Disclosures (TCFD), the Transition Pathway Initiative (TPI), the Institutional Investor Group on Climate Change (IIGCC) and constructive collaborations with pension funds and investors in Sweden and abroad.