Sweden’s big-four national pension buffer funds have stressed the importance of transparency around the work of their Council on Ethics (AP-fondernas etikråd), which carries out their responsible ownership work, and said the latest annual report is more open about talks with companies.

AP1, AP2, AP3 and AP4, which run the council, said in a statement that the 2021 annual report – released in Swedish last week – presented “a more transparent account of the impact dialogues and the milestones achieved”.

Peter Lundkvist, chair of the Council on Ethics, said: “It’s important for the council to be able to present even more transparent reporting on our dialogue work with companies and sectors.”

He said the council’s work was long-term and the impact of advocacy could be difficult to quantify.

“However, thanks to intensive internal work, we’ve further developed our reporting on the work the council is doing to improve sustainability work in companies,” said Lundkvist, who is also senior strategist and head of corporate governance at AP3.

The latest annual report is significantly longer than the previous year’s publication, and contains 22 detailed accounts of corporate dialogues compared to 13 such examples in the 2020 report.

However, the council said in the report that although it strove to be as transparent as possible in reporting how its own operations were conducted, it was “of the utmost importance” to safeguard the confidence it built up in a dialogue with a company.

“The work of achieving improvement often takes time,” it said.

The council is currently in a phase of potential change, with its longstanding secretary-general John Howchin having left at the end of December, and the four AP funds  having announced last October that a strategic review of the organisation would be carried out.

The funds, which collectively manage SEK1.9trn (€184bn), said work had started in the course of last year to “develop and further strengthen the activities of the council”, and that a report on that process would be presented in 2022.

According to the 2021 report, the council conducted eight proactive projects to improve sustainability in difficult and vulnerable sectors, and 85 reactive company dialogues to enable companies to address serious incidents and prevent future incidents.

The proactive projects included work on mining companies, work with tech giants on human rights, as well as advocacy projects, which included work on anti-corruption and climate change, the funds said.

In the council’s reactive work, the funds said that more than half of the dialogues in 2021 had been about suspected human rights violations, while a third related to business ethics and the rest concerned environmental issues.

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