Sweden’s buffer funds should be required to consider the impact of their holdings on global biodiversity, a Swedish pressure group has said.
According to the Fair Trade Centre, a local non-governmental group, AP 1-4 and AP7 should also use shareholder resolutions more regularly and improve their active ownership policies.
In its report, ‘Pushing the planet to retirement’, it also urged them to consider getting involved with international standards on a range of environmental matters, while conceding that they were already signatories to a UN-backed responsible investment undertaking on palm oil.
“The AP funds have demonstrated that their work with portfolio monitoring, engagement, exclusions and voting is not adequately guided by long-term strategies aimed at reducing the most important impacts on biodiversity and ecosystems,” the report said.
It further alleged that the funds were “lagging behind” their peers in integrating environmental, social and governance (ESG) concerns, despite repeated admissions that the Ethical Council was active and sought to engage with firms on matters that had yet to be widely supported by other institutions.
However, the NGO nevertheless argued that the lack of strategies on biodiversity was “symptomatic of the funds’ overall poor management of environmental and social impacts”.
It said the absence of ambition was down to the asset owner – in the case of the first four buffer funds, the Swedish government – in drafting guidelines on the matter, and expressed a hope the imminent reform of the AP fund system would allow for changes to be made.
Responding to the allegations in the report, AP2 – speaking on behalf of the four main buffer funds – said it was “well aware” that biodiversity was an important issue to question companies on and important for society at large.
It added: “Many of the Ethical Council’s corporate dialogues included questions about biodiversity and ecosystem services.”