The AP Funds’ Council on Ethics had a highly active 2022, with more than 3,200 companies being screened for possible violations and incidents. One project that was successfully closed in 2022 centred on child labour in the cocoa sector. A further 16 new dialogues were initiated. In eight proactive projects the focus is on human rights, the climate and corporate governance and 86 reactive company dialogues are ongoing, aimed at addressing and preventing serious accidents and incidents linked to lack of sustainability.
- “Through a proactive project on child labour in the cocoa sector, the Council has for several years been engaged in successful dialogue with seven of the world’s largest cocoa and chocolate suppliers. Significant progress has been made towards the goal of reducing child labour in cocoa farming, and eventually eliminating it altogether. The focus of the project has been to ensure that children in cocoa-growing communities receive education, to ensure systems for identifying and remedying child labour and to enable cocoa farmers to earn an adequate living. Challenges still remain, but in all these areas we can confirm that major improvements have been made”, says Pia Axelsson, Chair of the Council in 2022.
One important proactive project that the Council has reported on in the past is the one concerning the big tech companies and privacy-related issues.
- “Several milestones have been achieved and in 2022 preparations started on an international collaborative project with the tech companies. This will be led by the Council and operated in conjunction with other international institutional investors. The aim is via dialogue to exert influence aimed at improving the management of sustainability challenges such as disinformation, extremism and election manipulation”, says Pia Axelsson.
In its proactive work during the year, the Council contacted and assessed around 100 companies regarding their climate-based reporting, with the aim of following up advocacy work aimed at promoting greater transparency in line with the TCFD’s recommendations, issued in 2019.
- The Council found that companies have developed both focus on and transparency in climate-related issues. Most companies appreciated the feedback and the opportunity to discuss how they could further develop their reporting”, says Pia Axelsson.
The Council also collaborates with other investors through sector-wide dialogues, within the Climate Action 100+ project, in order to help companies in emission-intensive industries to develop roadmaps for transitioning to a low-fossil fuel society.
Through its reactive work, the Council exerts an influence on companies to address and prevent serious incidents. The objective is that companies should adopt a more systematic approach to sustainability via policies, implementation and transparent reporting, which may prevent incidents. More than 3,200 holdings in the portfolios of the AP Funds were screened during the year for incidents that could be considered to violate an international convention. 3,091 companies passed the screening process without comment.
- “At year-end, advocacy dialogues were ongoing with 86 companies identified in the process. More than half related to suspected human rights violations (60 percent), just under a third to corporate governance (25 percent) and the rest to the environment (15 percent). Most of the company dialogues led to positive outcomes”, says Pia Axelsson.
During 2022, the Council focused its attention intensively and in parallel on day-to-day and strategic activities, with the objective of assessing and refining the Council’s mission, goals, working processes and organisation. The Council’s work is still regarded as highly important to the administrations of all four AP Funds and the Funds agreed to increase the Council’s resources and establish a three-person office.
- “Through its strategic development activities, the Council’s reactive work will also, as of 2023, be extended to cover more asset classes. The Council will continue to screen foreign-listed shareholdings and, in addition, Swedish listed shareholdings and credit investments as well. Both directly owned and indirectly owned holdings through fund investments will be screened, with the objective of identifying companies deemed to violate international conventions to which Sweden is a signatory”, says Pia Axelsson.
The full Annual Report 2022, english version, will be available in late March. Read more about the AP-funds’ Council on Ethics here.
For more information, contact:
Pia Axelsson, Chair of the Council on Ethical in 2022: Tel +46 (0)8 786 75 72, e-mail: email@example.com
Karoline Hammar, Head of Communications, AP4: Tel: +46 (0)8 786 75 53, e-mail: firstname.lastname@example.org
About the AP Funds’ Council on Ethics:
The Council on Ethics is a collaboration between AP Funds 1, 2, 3 and 4, aimed at increasing the leverage to influence companies to pursue sustainable value creation and transparent reporting. The Council works via proactive projects with companies to reduce risk and help bring about positive change in not only complex sustainability challenges but also material systemic risks. The Council also works reactively to ensure that the company takes action when a violation of international conventions has occurred. Read more at etikrådet.se.