Stockholm (NordSIP) – Since 2007, the Council on Ethics of the Swedish state buffer pension funds AP 1 to 4 has served as a joint corporate engagement arm, influencing companies on behalf of all four organisations and providing guidance in matters related to exclusions. Today, the growing importance of sustainability for institutional investors comes with an increasing complexity and a wide range of nuances which are not necessarily easy to drive in unison. After all, the Swedish government has given a clear mandate to each AP fund to implement separate investment strategies and the time has come for each organisation to drive their sustainability agenda more independently as well.
In a press release, the first, second, third and fourth AP funds announced on October 15 that they have decided to conduct a strategic review of the Council on Ethics. Meanwhile, John Howchin, at the helm of the Council as Secretary-General for almost 12 years, announced his departure.
“A structure set in place 15 years ago for four very similar AP-funds needs a redesign to better suit the four diverging AP-funds we have today with their own strong sustainability strategies. This was always the likely course with four different AP-funds evolving their approaches and I wholeheartedly support what I believe is a natural development,” he comments in a post.
“Through dialogue and engagement, the Council on Ethics plays an extremely important role in driving positive change at foreign companies where the Swedish AP Funds are owners. The purposeful work has highlighted dialogues as an effective tool for improved sustainability work and better long-term returns – a work that will continue and be further developed. With great commitment and strong leadership, John Howchin has played a central part in taking the Council on Ethics to where it is today. We would like to thank him for his important contributions and wish him every success in the future,” say the CEOs of the four AP funds, jointly, in the press release.
“The AP funds and Council on Ethics today holds a strong position, both nationally and internationally, and is seen as a good example when it comes to responsible and sustainable investments. It has been an educative and interesting time where I have had the opportunity to contribute to sustainable development as well as closely follow the rapid positive developments in sustainability that have taken place within management and governance. The strategic review which is now initiated is a natural opportunity for me to leave the role of Secretary-General after 12 years. I want to thank the AP funds for the trust I have received during this time, and it is with pride that I finish my mission,” Howchin adds.
The departure of Howchin isn’t planned until the end of the year and the Council on Ethics will continue its day-to-day operations. An acting Secretary-General is said to be appointed soon, according to the press release. Peter Lundkvist, Senior Strategist and Head of Corporate Governance will continue as Chairman of Council of Ethics.
Meanwhile, Howchin who has yet to turn 50, does not disclose any precise plans but remarks that there is “Plenty of work to do in the real world” and suggests supporting the implementation of the Global Industry Standard on Tailings Management as well as BanQu, a blockchain-enabled supply chain tracking platform as possible upcoming projects.