New issues in focus during 2008 for The Council on Ethics

Press release
For more than 10 years, the AP Funds’ Council on Ethics has exercised influence on the AP Funds’ global portfolio of listed companies to improve their environmental, human rights and corporate governance work through engagement and dialogue. During 2018, the engagement and efforts of the Council on Ethics have been directed at problem areas such as Facebook and human rights; the use of pesticides threatening the survival of bees; and the legalisation of cannabis in Canada and the emergence of listed cannabis companies. Other focus areas have been oil companies’ long-term climate work, deforestation in South America, and tailings dams in Brazil.

With social media and fast-growing companies, the world is rapidly changing. Facebook, for example, is facing challenges pertaining to user integrity and human rights. The Council on Ethics has initiated a dialogue with the company on this specific issue. Oil companies such as Shell face the challenge of adapting their products to address climate change. The company has recently adopted a new, public long-term goal to reduce the carbon footprint of sold products. The goal is that net emissions over the entire life cycle from the energy products sold will halve by 2050 and decrease by 20 per cent by 2035.

During 2018, the Council on Ethics participated in the preparatory work related to the AP Funds’ new legislation, which includes revised investment guidelines as well as a new, ambitious sustainability goal. The legislation came into force in January 2019. It aims higher with regard to sustainability than the earlier regulations set in 2000. For the Council on Ethics, the working model will still be based on engagement and dialogue with a view to persuading companies to act in a more responsible way. This model is based on the conventions ratified by Sweden and has been applied by the AP Funds since 2007. The Council will continue to work to it when recommending the exclusion of a company.

John Howchin, Secretary General of the Council on Ethics of the Swedish National Pension Funds, says: “The wording in the old legislation – that the AP Funds ‘should take into account environmental and ethical considerations’ with regard to their investments – was indeed wise and ahead of its time. It offered the AP Funds guidance as well as the freedom to integrate and continuously develop their sustainability work, both in terms of their investment strategies and their ways of working. It also played its part in the establishment of the Council. This happened during a period of very rapid development and change in terms of the way society and the financial markets viewed sustainability. Today, 20 years later, almost all leading asset owners and managers are working with some form of sustainability strategy in place. With the revised legislation, the AP Funds and the Council on Ethics will have an even more powerful mandate regarding sustainability, and we will take that into account.”

Read more about the Council on Ethics’ company dialogues and other commitments in the Annual Report 2018.

For more information, please contact:
Ossian Ekdahl, Chairman of the Council on Ethics of the AP Funds,
telephone: +46 8 566 20 200
ossian.ekdahl@ap1.se

John Howchin, Generalsekreterare AP-fondernas etikråd,
telephone: +46 8 555 17 176
John.Howchin@ethicalcouncil.com