Sustainability & Active Ownership

Sustainable Value Creation

The operation of Första AP-fonden is based on our remit from Swedish Parliament through the AP Funds Act and the wording which states that asset management should be managed in an exemplary way through responsible investment and responsible ownership. Special emphasis shall be given to how sustainable development can be promoted without compromising on the overall objective regarding return and risk.

Första AP-fonden’s sustainability vision is to be a responsible investor and active owner that promotes sustainable development through investments and engaged active ownership. Our strategy for sustainable value creation shall help the Fund’s return target to be met or exceeded.

Based on our sustainability vision, we have formulated five sustainability beliefs that form the basis of our work on sustainable value creation.

1. Integration

Considering sustainability aspects in the investment process enhances our due diligence and puts us in a better position to generate high returns at a well-balanced level of risk. We believe that well-managed companies have greater potential than others to generate a good return over time.

2. Prioritisation

We prioritise material sustainability aspects and adapt how they are taken into account depending on the asset class managed by the Fund. The overriding consideration is that the companies we own harmonise with our core values and do not violate any international conventions or national laws. In addition, we balance aspects that are important to the portfolio, such as impact on return and risk, whether major sustainability effects can be achieved in relation to invested capital, or if there are significant risks of damage to reputation.

Första AP-fonden shall be a responsible investor and active owner that promotes sustainable development through investment and engaged active ownership.

3. Genuine improvements

Genuine improvements are a higher priority and more profitable over time than improvements in the portfolio’s key ratios solely from changed ownership of securities.  We consider the companies’ entire value chain, and sustainability analyses encompass everything from raw materials to end use of the products.

4. Influence and active ownership

By being an active, long-term owner, we can try to influence companies we own in a desirable direction when it comes to sustainability and active ownership. To maximise the impact we like to work with other investors through dialogue with individual companies, and especially through investor initiatives when it comes to influencing more systematic aspects.

5. Openness

Greater transparency in sustainability provides us with a better body of basic data when deciding on investments. We promote the development of relevant and comparable sustainability reporting, both among the companies and ourselves.

Our sustainability strategy encompasses all asset classes and clarifies how our sustainability work should be conducted in practice. Read more about our sustainability strategy here.

Expectations on companies

Första AP-fonden has produced a brochure clarifying our expectations on the operations we invest in.

Download the brochure

The UN’s Sustainable Development Goals (SDGs)

Första AP-fonden has pledged to promote the UN’s Sustainable Development Goals. The Fund has chosen to focus on the seven goals that are deemed to be most relevant, while also helping to create a positive change in society.

The following three goals are often in focus in our dialogue with companies:

  

5 – Gender equality

8 – Decent work and economic growth

16 – Peace and justice, strong institutions (with a focus on the target area of corruption and bribery)

Our dedicated investments, which contribute to major sustainability effects in relation to the capital invested, and also meet the Fund’s overarching return target, shall fulfil at least one of the goals.

7 – Affordable and clean energy

9 – Industry, innovation and infrastructure

11 – Sustainable cities and communities

12 – Responsible consumption and production

Together for sustainability

Första AP-fonden is a major investor that has a key role in society. We have endorsed various international and Swedish frameworks, principles and collaborations.

Read more about frameworks, principles and collaborations

The Council on Ethics of the Swedish National Pension Funds

In the AP Funds’ Council on Ethics, the four AP Funds work together to influence foreign companies towards greater corporate sustainability through dialogue and a long-term approach.

Read more about the AP Funds’ Council on Ethics

Common guidelines

Based on legislation, the First, Second, Third and Fourth AP Funds (AP1–4) have developed common core values and common guidelines for reporting on sustainability objectives, and which assets funds should not be invested in.

Contact

Magdalena Håkansson

Head of Sustainable Value Creation

magdalena.hakansson@ap1.se