Första AP-fonden Ownership Report 2018: focus on developing sustainability work and preparing for changes to the AP Funds Act

Första AP-fonden (AP1) publishes its Ownership Report (English version) for 2018 today. Developments in the field of sustainability continued at a fast pace during the year. Intensive preparations were made ahead of the changes to the AP Funds Act, in partnership with the other AP Funds.

During the year the Fund voted at shareholder meetings in 32 Swedish and 570 foreign companies. This means that the Fund voted in all of the shareholder meetings in Swedish companies, and in the majority of the companies on developed markets where the Fund owns shares. The Fund is represented in 11 nomination committees in the run-up to the Swedish 2019 AGM season.

During the year, special attention was paid to the measurement company Hexagon and the two gaming companies Stillfront and Starbreeze. The legal proceedings against Hexagon’s President and CEO were carefully monitored. As a major new owner in Stillfront the Fund joined the nomination committee, where the process of proposing a new board required extensive discussions. At the end of the year, Starbreeze filed for a corporate reconstruction. Some members of the board left the company and new directors had to be appointed.

Over the past year AP1 further developed its sustainability work through an overarching internal process, partly by formulating specific sustainability beliefs.

“Taking sustainability into account is one of the core beliefs from which we work. We integrate sustainability into our investments so as to increase returns and reduce financial risk in the long run. The sustainability beliefs sum up our approach to sustainability and can be applied in practice throughout the organisation,” says CEO Johan Magnusson.

On 1 January 2019, the changes to the AP Funds Act came into force. The revised law states that funds should be invested in an exemplary way through responsible investment and responsible ownership, and is a tightening of the law compared with earlier wordings.

To prepare for the changes to the AP Funds Act, during the year AP1 worked intensively with the other AP Funds to clarify the Act’s requirements on acting in an exemplary way from a sustainability perspective. The collaboration between the Funds encompasses core values for asset management, as well as guidelines on reporting goal attainment and which assets funds should not be invested in.

As before, the guidelines for deselecting investments are primarily based on international conventions signed by Sweden.

“Furthermore, AP1 is choosing not to invest in a hundred or so companies that produce tobacco, nuclear weapons, thermal coal or oil sands, even though these companies do not directly breach international conventions. We are also excluding companies that produce cannabis for non-medicinal use,” says Ossian Ekdahl, Chief Active Ownership Officer.

Download AP1’s 2018 Ownership Report here.