Swedish institutional investors have reacted cautiously to Ericsson’s decision to remove gender diversity targets from its executive remuneration programme, marking the second consecutive year the telecoms group has scaled back its formal diversity, equity and inclusion commitments.
Several of the country’s largest pension funds described the move as disappointing, though most signalled they will continue to engage with the company ahead of its annual general meeting (AGM) later this month.
“It is, of course, regrettable to hear that they are stepping back from the target and thereby weakening the work on diversity, which we continue to consider an important issue,” said Åsa Norman, head of communication and sustainability at AP2.
AP3 confirmed it has already raised the issue directly with the board. Peter Lundkvist, head of ownership at the fund, said: “AP3 works to ensure that companies introduce sustainability requirements in their variable incentive programmes and therefore finds it regrettable that Ericsson’s board has chosen to step back from previous sustainability requirements aimed at increasing the representation of female executives.”
Lundkvist added that the fund discussed the proposal with Ericsson when providing feedback on the company’s new long-term incentive programme, which shareholders will vote on at the AGM on 31 March.
Other investors struck a more measured tone.
“AP4 is convinced that diversity in experience, background and competence strengthens organisations and creates the conditions for long-term value creation. Even though the company is now choosing to remove the stated target for a higher proportion of female leaders, we retain confidence that work to strengthen diversity in the leadership tier will continue. This is something we will follow-up on in our ownership dialogue,” said Tobias Fransson, head of sustainability, finance and communication at the fund.
Pension and insurance provider AMF also took a pragmatic stance.
Jens Söderblom, head of press, said: “We view clearly formulated targets favourably, but think it is good that Ericsson commits to continuing to work actively to become a more equal and inclusive company.”
He added that AMF maintains ongoing dialogue with the company as part of its engagement with major Swedish holdings and is looking forward to following Ericsson’s work.
Sustainability reporting shift
The latest change follows a broader shift in Ericsson’s sustainability reporting. The company’s 2025 annual report further reduced references to diversity and inclusion and removed the formal target to increase the share of women in senior leadership from both its sustainability disclosures and long-term executive pay framework.
According to a report in the Swedish financial newspaper Dagens Industri, Ericsson’s press chief Ralf Bagner said the decision reflects changes in the global ESG environment, particularly in the US market, which accounts for around 40% of the company’s total turnover.
He also indicated that the company still aims to increase the proportion of female leaders and that this ambition remains reflected in the annual report, but that the company believes it must find other ways to create impact given the shifting external environment.
A spokesperson at Norges Bank Investment Management, that manages Norway’s Government Pension Fund Global, said it does not comment on its dealings with individual companies.
However, she referred to NBIM’s human capital expectations, which state that portfolio companies should take a proactive approach to diversity and inclusion and disclose metrics allowing year-on-year progress to be assessed.
The Norwegian sovereign wealth fund typically publishes its voting intentions five days before shareholder meetings, meaning its position on Ericsson’s remuneration proposals is likely to become public around 26 March.
