Swedish AP funds join sustainability initiative
SWEDEN/NORWAY - The four Swedish AP pension buffer funds are among 13 institutional investors that have signed up to the Sustainable Value Creation Initiative (SVC) to encourage companies to adopt good governance of sustainability issues.
This is the first time the initiative has been launched outside of Norway, where it was established in 2008, although both the Swedish and Norwegian investor groups aim to influence listed companies to "develop sustainably while at the same time create long-term value for their owners".
The newly established Swedish group of investors has combined assets of SEK 3.8trn (€371.8bn) under management, compared to NOK 2.5trn (€289.5bn) held by the nine members of the Norwegian Group.
Besides Första AP-fonden (AP1), Andra AP-fonden (AP2), Tredje AP-fonden (AP3), and Fjärde AP-fonden (AP4), other members of the Swedish group include DnB NOR Asset Management, Folksam, and the Church of Sweden.
Meanwhile the Norwegian investor group, which is now into its second year of the initiative, includes KLP, Folketrygdfondet - the organisation responsible for the Government Pension Fund Norway - and the ministry of trade and industry.
Under the collaborative project a survey on governance and policies relating to sustainable value creation, including human rights and corruption, has been sent to the 100 largest companies on the NASDAQ OMX Stockholm, and all 74 companies listed in the Oslo Børs Benchmark Index.
The survey questions focus on four main areas:
The SVC Initiative argued that by improving environmental and social aspects in their operations, corporations can reduce risks and costs as well as take advantage of and develop business opportunities.
It added: "Addressing these issues contributes to sustainable value creation that we investors see as fundamental to the future financial return on our client's savings".
Annika Andersson, head of corporate governance at AP4, said: "AP4 is involved with this project because we want to increase the awareness among Swedish companies of the emphasis we as an investor put on sustainability. We also want to contribute to better reporting practices on sustainability factors from the companies."
The extension of the initiative is the latest in a series of projects in the Nordic region to try and utilise the power of institutional investors to improve sustainability and environmental and social governance (ESG) issues. In December 2008 three pension funds from Finland, Norway and Sweden joined together to form the Nordic Engagement Cooperation (NEC). (See earlier IPE article: Nordic pension funds team up on ESG)
The results of the two SVC surveys will be published in January 2010 and further information on the initiative, including a full list of members and the companies targeted by the survey can be found at www.svcinitiative.com
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