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AP6

PRI reporting framework 2018

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          Active ownership / engagement policy
        

01.3. Indicate if the investment policy covers any of the following

01.3a CC. Describe how your products or investment strategy might be affected by the transition to a lower-carbon economy.

Climate change challenges the basis of economic prosperity through undermining the climate stability necessary for human life and activity. For AP6, as part of the Swedish public pension system, tasked with the provision of pensions to future pensioners, climate related physical and transitional risks can negatively affect long term returns. Likewise, climate related opportunities can positively affect returns. Therefore, considering climate change related effects on AP6's investments is required and prioritised.

01.3b CC. Describe how climate-related risks and opportunities are factored into your investment strategies or products.

Climate related risks are factored into investment strategies through the integration in due diligence and monitoring of direct investments as well as indirect investments.

Furthermore, AP6 typically avoids investments in fossil fuel on the basis of climate change and the transition to a low carbon economy. As per 31st December 2017, energy related investment accounded for 2.1% of the value of AP6's PE portfolio.  

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

AP6’s mission is to generate a long-term high return with adequate risk diversification. AP6’s role in the Swedish AP pension system is to invest in the Private Equity (PE) market, which is the market for unlisted assets. These types of investments typically have the following characteristics:

Investing in unlisted companies requires specialist expertise and well-developed models for exercising the role of active owner. AP6's investment strategy is based on combining specialist expertise in order to invest both indirectly (through external funds) and directly in unlisted companies.

AP6 has ratified the UN Principles for Responsible Investment (PRI) along with the ten principles of the UN Global Compact. According to AP6's investment policy and ownership policy, AP6 commits to integrating sustainability into its investment activities. This involves follow-up and evaluation in line with accepted international conventions in the areas of human rights, labour rights, environment and anti-corruption. AP6's Code of Conduct and ownership policy specifies the approach to responsible investment.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

AP6 has committed to ensuring that the companies and funds it has invested it:

‐ Respect human rights and are not involved in any abuses of human rights

‐ Respect and maintain the freedom of association and right to collective bargaining

‐ Are not involved in forced labour or child labour

‐ Respect the principle of non-discrimination

‐ Minimize their use of resources and any negative impact on the environment

‐ Contribute to solutions on global environmental challenges

‐ Identify and take action on climate-related risks and opportunities

‐ Counteract all forms of corruption, including extortion and bribery


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Business decisions must always be made in the best interests of AP6. Employees may never use their position or influence for any other purpose than promoting the best interests of AP6. Personal relationships and considerations may never influence the decision-making process. This applies to potential benefits for employees, but also to benefits that may befall relatives and friends. To avoid conflicts of interest, employees may not conduct work outside AP6 in any form (in another employed position, on a consultancy basis or in the form of board work) without informing and receiving the consent of AP6's President. Even non-remunerated activities may be inappropriate. In the event of the slightest risk of conflict of interest, the employee must immediately inform their superior of the circumstances.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

          Indirect investments: Incident reporting is a sub-category of pre-investment sustainability due diligence as well as monitoring after commitment. AP6 requires adequate and swift incident reporting and incident management action plan.  
Direct investments: AP6 requires adequate and swift incident reporting from directly owned companies to the board of directors, which then has the overall responsibility to secure that the incident is well managed. AP6's internal follow-up of incidents is conducted every four months.
        

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