The default fund for Sweden’s PPM investors, SEK14.5bn (e1.57bn) Sjunde A P-fonden (AP7), has blacklisted 30 companies from its equity portfolio following a scathing report on their environmental and ethical records.
Reasons for excluding the stocks range from discrimination of women in a company’s workforce to manufacturing landmines, according to Peter Norman, managing director of AP7.
When the AP funds were established at the end of last year the Swedish government gave them a mandate to consider environmental and ethical issues in the allocation of fund assets, without jeopardising their performance.
“What we did really was to have two cornerstones, so to speak, the first is that companies in Sweden should obey the Swedish law, and companies outside Sweden should live up to the conventions and treaties signed by the Swedish government,” Norman says.
Unlike most other ethically invested funds, AP7 has not excluded tobacco, alcohol and firearms from its portfolio, on the grounds that a lot of people drink and smoke, and also because the Swedish government is involved in arms manufacturing and trade.
According to the fund, its decisions are based on court judgements, official investigations or direct admission on the part of the companies’ management after investigations of their record regarding violations of human rights.
“The underlying, the only, reason for excluding companies is the hope that they will be persuaded to change their production, employment policy or whatever it was that led to their being excluded,” Norman says.
An official report from the AP7 gives examples of some the firms excluded from its portfolio.
The only Swedish company dropped by AP7 is stationery manufacturer Esselte, whose factory in Tijuana, Mexico, AP7 claims, has imposed mandatory pregnancy tests on its female workers.
The AP7 report, alleges: “Reports show that women have been required to state whether or not they are pregnant when applying for jobs at the plant, and that female employees there have had to undergo pregnancy tests.”
Other companies on the AP7 blacklist include US based Chevron Corp, USA.
The Swedish fund claims Nigeria’s military forces have on three occasions used vehicles, including boats and helicopters, on contract from a joint venture company owned by a Chevron subsidiary, in intervention against demonstrators and local civilian populations.
US company Sears Roebuck & Co has also been excluded, with AP7 alleging: “Since the conditions at Daewoosa Samoa Ltd, a company that manufactures clothing for the American company, include, it is reported, slavery, failure to pay wages, harassment of women, starvation and inhuman living conditions.”
According to Norman, the exclusion of the 30 companies on the AP7 black list, would have affected the fund’s returns by only 0.1% during the last two-year period that they were included in its portfolio.

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