Ethical and environmental consideration in our investments
Första AP-fonden takes ethical and environmental consideration in its investment operations. According to the assigned mission, this is done without compromising the Fund’s overall objective of attaining a high return.
It is the Fund’s conviction that an investor has better leverage to pressure a company by utilizing its ownership influence than by selling its shares. As a last report, however, the Fund may decide to divest its holdings if the discussions do not produce the desired results.
Ethical and environmental policy
The Fund’s ethical and environmental policy is an integral part of its ownership policy. The principles in Första AP-fonden’s ethical and environmental policy are the same as those expressed by the Swedish government through the signing of international conventions and agreements regarding human rights, labour, the environment, bribery, corruption and the use of certain weapons.
If it is probable that a company in which Första AP-fonden has invested can be associated with infringement of any of the above conventions, the Fund attempts to persuade the company to change its actions in order to avoid future infringements. Rather than selling its shares in the company, the Fund uses its ownership influence in a constructive manner by cooperating with the affected companies to change their behaviour in these areas.
A systematic process
Since 2002, Första AP-fonden has taken active measures to urge companies to take ethical and environmental consideration. The working methods have evolved gradually and now follow a well established and systematic process.
- Screening of the Fund’s investment portfolios to identify companies that can be associated with infringement of international conventions (with the help of the external consultant GES Investment Services).
- Constructive dialogue with the identified companies in order to bring about a lasting change in the company’s behaviour and prevent similar events in the future.
This can be accomplished by
- conducting a direct dialogue with the company, individually or together with other investors.
- exercising voting powers in issues related to sustainable development.
Starting in 2007, SRI analysis and on-going dialogues will be handled jointly through the AP funds’ newly formed Ethical Council.
Aside from responding to suspected infringement of conventions, the Fund systematically reviews all of the Swedish companies in its portfolio. The goal of these discussions is to exert the Fund’s influence in urging its portfolio companies towards corporate environmental and social responsibility.