Stockholm (NordSIP) – Folksam LO Pension (LO), the Swedish Trade Union Confederation and subsidiary of Sweden’s leading insurance and investment management company the Folksam Group, has reinforced its emphasis on sustainability, mandating tougher criteria for sustainable investment that places more stringent demands on companies that employ members of LO.
“We offer affordable fund insurance with good long-term returns and a responsible fund offer,” offered LO CEO Mia Liblik in a press release. “So it’s a natural step for us to develop our sustainability efforts and assess issues that our customers and members of LO think are important.”
Liblik pointed to customer surveys finding that labour regulations, child labour, and inequality in the labour market are the issues that engage the most, with most customers demanding of LO to exert more influence on companies to make improvements in these areas.
“We will therefore have an extra focus on these areas in our work on sustainability, and are already working to influence companies through companies,” added Michaela Olsson, Director of Sustainability at LO. “In addition, we have initiated various partnerships, such as the ‘Global Deal’, where we can work for better working conditions, equality and global equality together with other companies and nations.”
Unlike its parent company Folksam, LO does not itself invest in businesses. Instead, it selects the fund management companies that invest customers’ money. While this makes it harder to influence the sustainability quotient of companies, that does not make it impossible, according to Olsson.
“We affect the fund companies, which in turn help us to raise the sustainability issues of individual companies. In close cooperation with fund companies we can continuously evaluate the work being done and its results. We find that most people listen to us, so we are in a position to indirectly influence companies to become more sustainable,” Olsson explained.
Only four out of 30 funds in the LO portfolio met the new tougher sustainability criteria demanding that sustainability be an integral part of the investment process, but all have committed to the new requirements, making it likely that only a few will need to be divested by years’ end, according to the managers.