AP3’s sustainability process
Offers support when making difficult decisions
As a major investor, AP3 has the opportunity to influence developments in a sustainable direction. To exert the greatest impact, sustainability work must be focused where AP3 can make the biggest difference and generate the most value for the state income pension system.
Sustainability process
Sustainability work is integrated across all the Fund’s management units, with the groups responsible for complying with the responsible investment policy and contributing to the analysis of sustainability-related risks and opportunities.
AP3 is convinced that well-managed companies are better investments. The greatest opportunity to contribute lies in how the Fund invests and exercises its stewardship. By integrating sustainability aspects in invest ment decisions, AP3 identifies opportunities to create long-term value and reduce sustain ability-related risks. The Fund works actively AP3’s sustainability process with the companies in AP3’s portfolio to support their transition towards more sustainable business models. In this way, AP3 contributes to societal change and to achieving important global goals, such as those in the Paris Agreement.
AP3´s sustainability process
Sustainability framework with minimum requirements
AP3’s ambition is to fulfill its mission as a responsible owner through active ownership management. This means that the fund also invests in companies and sectors with significant sustainability challenges. However, this does not mean that AP3 can or wants to be invested in all companies, especially companies whose operations are not sustainable or do not develop in a sustainable direction at all.
AP3 does not invest in all companies
For AP3 to invest in a company, there must be a clear ambition to act long‑term and to integrate sustainability considerations into the business.
Not all companies meet these requirements. The fund avoids companies whose operations are not considered sustainable in the long run, or that are developing in a negative direction.
AP3 regularly reviews its entire portfolio and continuously assesses which companies, based on sustainability‑related grounds, should not be included. AP3 does not invest in:
companies ranked among the lowest in sustainability within AP3’s investment universe.
companies that systematically and extensively violate international conventions on the environment, human rights, labour rights, or anti‑corruption.
companies that receive a significant share of their revenues from the production, processing, distribution, marketing, or sale of cannabis or tobacco.
companies involved in the production of anti‑personnel mines or cluster munitions
companies participating in nuclear weapons programs in countries not covered by the Non‑Proliferation Treaty (NPT)
companies engaged in coal extraction or coal‑based energy production
companies with high CO₂ emissions that lack long‑term climate targets
In addition to these criteria, AP3 continuously reviews how companies manage their most material sustainability risks.
See also the AP Funds’ Council on Ethics’ overarching positions.
The Council develops overarching position statements when needed to clarify the AP Funds’ standpoint on certain sustainability issues.
The sustainability work is subject to goals
Setting goals that are followed up is an important part of achieving clear results and integrating sustainability work in the portfolio. The goals vary in nature depending on the focus area and may be both quantitative and qualitative.
Sustainability risks and opportunities
AP3 focuses its sustainability work where risks and opportunities are deemed material and where AP3 has opportunities to make a difference. The fund identifies which sustainability risks have the greatest impact on sustainable development and which are deemed to have the greatest impact on AP3’s investments.
Proactive governance – locally and globally
AP3’s exercised stewardship work varies depending on what the ownership looks like. The fund conducts corporate governance based on the conviction that well-managed companies create shareholder value and contribute to sustainable societal development. Being a committed and responsible owner means exercising our voice at general meetings, having dialogues with the companies and participating with other owners and other stakeholders in various national and international initiatives and contexts that promote good corporate governance and sustainable development.
Results
The outcome of AP3's sustainability process is clearly reported with the aim of being result-oriented and able to be evaluated. As part of the mission to act as a role model in institutional asset management, AP3 together with other AP-funds develop common guidelines for how the results in the area of sustainability should be reported.
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Respect for the environment is at the centre of the AP3 investment approach. The Fund’s direct environmental impact is relatively small, consisting primarily of business travel, use of energy for office heating and cooling, and waste.
To ensure that sustainability efforts are focused on the areas deemed to have the greatest impact on investments, AP3 works with focus areas. Based on the Board’s positions, AP3 is currently working with the following four focus areas: Corporate governance, Climate, Human rights and Biodiversity.
As the Third Swedish National Pension Fund AP3 is guided by the international conventions and guidelines ratified and supported by the Swedish Parliament. Examples include the UNFCCC with the Paris Agreement, the Convention on Biological Diversity and Agenda 2030.