Swedish foundations are charitable rather than commercial institutions, with a broader social responsibility than a pension fund. So it is perhaps not surprising that many have turned to socially responsible investment (SRI).
Mistra, the foundation that supports Swedish environmental research, decided last year that between 10% and 20% of its portfolio of US and European shares would be chosen on positive environmental and ethical criteria. It said that this percentage is likely to increase.
Vårdalstiftelsen, the foundation for healthcare research, has followed the example of the Seventh AP Fund, the default fund that manages the buffer capital in the Swedish pension system. This made news last year when it sold its holdings in 27 international companies whose behaviour it judged to be unethical.
The foundation scrutinises companies regularly from an ethical and environmental viewpoint using an analytical model developed by Etikanalytikerna, a Stockholm firm of ethical consultants, now part of The Caring Company. The model involves screening companies for violations of human rights, the child labour convention, International Labour Organisation conventions, international environmental conventions, and conventions against bribery and corruption.
Last year it sold its holdings in BP Amoco, Nestlé, Chevron , Siemens, TotalFinaElf , Unocal, Target. Wal-Mart Stores and Exxon for various violations. Earlier this year, it disposed of its holdings in Coca-Cola, General Electric, Novartis and Tyco International.
The Swedish Foundation for Strategic Research (SSF) is also moving into SRI, but in a rather different way. Last year, it invested Skr200m in a pan-European equities fund managed by UK investment mananger Scottish Widows Investment Partnership. SWIP is now offering an alternative pan-European fund which is SRI-screened
SSF has the option to move some or all of its money into the SRI version of the SWIP fund. So far, it has moved only a small amount – Skr10m – into the SRI fund. However, it says it is likely to increase its investment.