Responsible Investments
Sustainability
For AP6, responsible investments and sustainability are prerequisites for delivering a long-term high return. Sustainable development is fundamental to the well-being of future generations and for generating an economic return to future pensioners. As a Swedish, state-owned pension fund, AP6 can and should be a forerunner for responsible investments and sustainability.
Responsible Investments
Since 2013, sustainability has been an integral part of AP6’s investing activities, e.g. as a component of the review and follow-up on investments. As an investor in various types of businesses, sectors and geographic locations, it is necessary to have a broad approach to sustainability, based on international agreements on human rights, labour rights, the environment and anti-corruption.
AP6’s Code of Conduct provides the foundation for its responsible investment activities. Each year, the Board establishes sustainability targets for investing activities.
The sustainability report is integrated in the Annual Report. To get a complete overview of the work with sustainability, the entire annual report is recommended. In the table of contents, all sections dealing with sustainability are marked with the letter S.
Memberships and Commitments
Focus Areas
Three focus areas within AP6’s sustainability work
Gender Equality Diversity
Equality and diversity were established as a focus area for AP6’s sustainability work both in investments and within the own organization in 2015. Since 2016, equality and diversity have been included as a mandatory element in the review and follow-up of investments.
AP6 asks questions before investment and during ownership about what is being done to promote equality and diversity in both managers and companies. Generally speaking, there is a clear awareness among managers and companies that equal organizations with a high degree of diversity attract the best talent and contribute to better decisions and results in the long term. At the same time, the impact is delayed of introduced measures in the part-owner structure that characterizes many of the players in private equity.
Climate
Actively working with the climate issue has long been a focus area for AP6. With the long-term mission to contribute to a system that will secure pensions for many generations to come, the climate issue has a high priority. Climate change and related changes in society affect investments in almost all sectors.
With the long-term mission to contribute to a system that will secure pensions for many generations to come, the climate issue has a high priority. Hence climate was established as a focus area in 2015 and has since been included as a mandatory element in the review and follow-up of investments. AP6’s main climate impact consists of the investment portfolio’s climate impact. The investment portfolio is also the area most affected by climate change and related changes.
Human rights
The human rights focus area was established in 2021 with the aim of developing the approach regarding social sustainability issues with a visionary goal that the use of international frameworks for human rights in the investment process and ownership can become standard within private equity.
During 2023, a number of activities have been carried out in line with established milestones to create a greater understanding of the current situation, as well as to increase knowledge of international framework for human rights both in the organization and in the portfolio. A human rights evaluation model has been developed for indirect investments in private equity based on the UN Guiding Principles on Business and Human Rights, an international framework for corporate responsibility for human rights.
Sustainability work in the portfolio
Sustainability is integrated with investment activities. Well-developed models and tools are used for evaluation before an investment and during the ownership phase. Resources are continuously allocated based on identified issues and needs.
Sustainability, or ESG (environmental, social, governance) is an area where AP6 is clear about its expectations and commitments. It may be about an expectation of a higher level of ambition as well as improved and in-depth reporting linked to various key figures. Impact regarding sustainability is exercised through collaboration, evaluation and feedback. AP6 has extensive experience in evaluating funds’ work with sustainability. This is expressed in the model that AP6 developed to measure, analyze and evaluate the funds’ ESG work.
The sustainability work in the portfolio is to be found in the section Ownership phase in the annual report.
Event / Article
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AP6’s human rights round-table
Read more: AP6’s human rights round-tableThe event held in Stockholm in September sought to gather GP representatives from AP6’s portfolio to explore social sustainability factors’ increased importance in private equity investing and sharing practical approaches to human rights due diligence. The level of engagement and the high interest in the topic provided for great discussions and opportunities to advance industry…