SWEDEN/US - The ethical council for Sweden's national pension buffer funds supports the filing of a resolution regarding labour issues at US company Wal-Mart.

Several institutional shareholders are demanding a report on allegations of poor working conditions at some of the stores be finished by September.

A proposal initiated by New York City Employees' Retirement Fund, and which is also supported by asset manager F&C as well as other US pension funds, will be presented at the company's annual general meeting today.

All four Swedish buffer funds involved in the creation of the ethical council in February - AP1, AP2, AP3 and AP4 - support the demand for a report although only the three which actually own Wal-Mart shares could file the relevant section of the proxy statement.

The Norwegian Government Pension Fund's decision to sell its €321.7m stake in Wal-Mart last June is also quoted.

However, as a relatively small shareholder it makes sense to stay invested, Nadine Viel-Lamare, spokeswoman for both the largest buffer fund AP1 and the funds' ethical council explained to IPE.
"As long as we are a shareholder we have the possibility omaking a difference. Of course, when you are a large shareholder selling your shares could have an impact - but you don't really know if it would," said Viel-Lamare.

She added AP1 has been engaged in dialogue with Wal-Mart for some time but has seen slow change so far.

However, she did not exclude the possibility of disinvesting at a later stage should it become clear the company is not listening to shareholder demands.

AP1 holds 1,742,300 shares in Wal-Mart Mexico and just over 1 million in Wal-Mart stores. The other AP funds hold smaller stakes in the US retailer and the combined holding is estimated to be worth around €50m.

Sweden's Second AP fund disinvested from Wal-Mart last September after failing to influence the retailer over employee rights, despite a three-year lobbying effort.