Stockholm (NordSIP) – Nordic voters designated the Swedish state pension fund AP7 as the most sustainable Asset Owner in the 2019 edition of the IRRI survey. NordSIP had a chance to catch up with Johan Florén, Head of Communications and ESG at AP7 who shared some of his organisation’s key achievements.
We are Active Universal Owners, and we invest in solutions to climate problems.
“At AP7, we do two things: we are Active Universal Owners, and we invest in solutions to climate problems,” Florén starts. “We own about 3,000 companies in our equity fund and vote at 99 per cent of all Annual Meetings. We engage with about 300 of the companies we own and blacklist 60-70 companies. Securities Litigations is also a governance tool, and we currently have about 15 cases going on there.”
More precisely, according to its latest Sustainability Report (in Swedish), AP7 voted on 3,037 of 3,062 possible AGMs in 2018 in 56 different countries. At 46 per cent of these AGMs, AP7 voted against the Board’s recommendation at some point, either by voting against a proposal from the Board or voting for a shareholder proposal that the Board did not support.
We believe that you can contribute the most by being an active owner.
“If you want to make a difference from a sustainability perspective and you are the type of investor we are, we believe that you can contribute the most by being an active owner,” Florén continues. “Perhaps we take this perspective one step further than many others, e.g. with climate-related shareholder resolutions both in Europe and globally. We have also integrated the Paris agreement in our norms-based blacklisting and engagement.”
“Our engagement around Corporate Climate Lobbying together with Church of England and BNP Paribas has been very rewarding,” notes Florén, referring to a project launched against Europe’s 55 largest emission companies to investigate the companies’ lobbying on climate legislation.
The same year, AP7 started a shareholder motion at RioTinto’s Annual General Meeting in Australia concerning the management and reporting of the company’s climate lobbying. The pension fund also engaged in defence of minority investor rights at Facebook.
The finance sector needs to focus on things that really make a difference.
“We have also launched an impact mandate in our listed equity portfolio, built around SDG 6 (clean water) and SDG 13 (climate action),” Florén continues. “This mandate allows us to contribute to the development of the methodology around this very promising type of investments.”
Amidst an ever-developing offering of sustainable strategies, Florén is not particularly worried about ‘greenwashing’, but investments with concrete positive impact may be hard to find. “If greenwashing means to be intentionally deceitful, I don’t think it is a major problem within sustainable finance today,” he explains. “The big challenge is instead to identify those strategies and activities that are not just mere signalling of good intentions. The finance sector needs to focus on things that really make a difference.”
Picture courtesy of AP7