Sweden’s government has announced it is giving new sustainability goals to AP6 – the smallest of the five buffer funds behind the country’s income pension system – bringing this aspect of its mandate into line with those of its larger peers.
The proposed new rules mean the Gothenburg-based fund, which invests solely in private equity, will be required by law to integrate environmental, social and corporate governance (ESG) aspects into the management of its assets.
The chief executive officer of the SEK45.2bn (€4.5bn) buffer fund welcomed the proposal that sustainability goals be written into the law governing its operations.
Katarina Staaf, CEO of AP6, said: “It is very good that the sustainability work that AP6 has been conducting for 10 years is now being formalised.
“Over the years, AP6 has on its own initiative developed its own evaluation models to measure and follow up the sustainability work in the portfolio,” she said.
In its announcement, the finance ministry said the fund would manage its assets “in an exemplary manner through responsible investments and responsible ownership,” adding that the purpose of its proposal was “to strengthen and clarify the regulations regarding the Sixth AP Fund’s sustainability work.”
The ministry said the new goal corresponded to the goal of exemplary management that has applied to the first four AP funds since the beginning of 2019.
Åsa Lindhagen, Sweden’s minister for financial markets, said: “We are in an acute climate and environmental crisis. Money is power, and how we manage our pension money matters.”
The government said that its proposal would also require AP6 to report on how it was achieving the management goals.
The deadline for responses to the consultation on the proposal is 12 January 2022, and the new rules are to become law by 1 July 2022, the ministry said.