Sweden’s AP funds launch joint SRI council to vet foreign equities

SWEDEN - Sweden's national pension buffer funds, AP1, AP2, AP3 and AP4, have introduced a joint ethical council to review their socially responsible investment (SRI) holdings in foreign companies.

"The funds' collaboration will be based on a systematic screening of their investment portfolios in order to identify and examine possible infringement of international norms and conventions," the funds said in a statement today.

In December last year, following an earlier joint tender, the funds with assets in excess of €80bn, appointed GES Investment Services to take on this screening procedure.

The ethical council will review a total of 3,500 foreign companies globally, but the collaboration does not extend to Swedish firms, for which the respective AP funds already have their own policy and will need to decide individually.

Three of the four AP funds have signed the Principles for Responsible Investment (PRI), an international framework to consider SRI issue, a spokeswoman told IPE.

Under the collective council, the funds aim to have an "active dialogue" with around 10 companies that can be associated with infringement of international conventions in areas related to the environment, human rights and labour rights.

AP1 spokeswoman Nadine Viel Lamare, who has been appointed as the council's chairwoman, commented that the funds' joint net assets under management and joint forces provide more scope to influence individual companies, than if the funds were to act separately.

"Furthermore, by coordinating our activities we will facilitate collaboration with other international stakeholders who are actively committed to ethical and environmental compliance," said Viel Lamare.

The ethical council is made up of one representative from each of the AP funds, the chairmanship will be alternated between the funds.

The principal aim is to get companies to review their policies. Divestment is a last resort and decisions to exclude companies from the investment portfolio will have to be made by the individual funds, Viel Lamare told IPE.