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PRI reporting framework 2018

Export Public Responses

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Outputs and outcomes

LEI 12. How ESG incorporation has influenced portfolio composition

12.1. Indicate how your ESG incorporation strategies have influenced the composition of your portfolio(s) or investment universe.

Describe the influence on composition or other effects

The aim of AP4's long-term low-carbon strategies is - with limited risk – to opt out of companies with the greatest and most negative impact on the environment in terms of carbon dioxide. The companies where AP4 invests are regularly evaluated on the level of their emissions and their fossil fuel reserves. Low carbon strategies are strategic positions with a long-term investment horizon. Investments are judged to significantly reduce climate risk in AP4's equity portfolio, allowing for a positive return over the long-term.

12.2. Additional information.[Optional]

LEI 13. Measurement of financial and ESG outcomes of ESG incorporation

13.1. Indicate whether your organisation measures how your approach to responsible investment in Listed Equity has affected your portfolio’s financial and/or ESG performance.

b) Funds’ financial performance: return

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' financial performance: return

c) Funds’ financial performance: risk

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' financial performance: risk

13.2. Describe how you are able to determine these outcomes.

Measure the performance and risk with the Funds low carbon portfolios vs index

LEI 14. Examples of ESG issues that affected your investment view / performance

14.1. Provide examples of ESG issues that affected your investment view and/or performance during the reporting year.

ESG issue and explanation

Portfolios that reduce climate risk in its equity investments by reducing exposure to companies with relatively high carbon emissions and/or fossil fuel reserves.

Impact on investment decision or performance

Carbon footprint reducing strategies has had a positiv inpact on performance and encourage AP4 even more to continue with that strategy.

ESG issue and explanation

AP4 has invested in Japanese strategic investments with a focus on corporate governance, TMAM GO Japan Engagement Fund and GO Japan Engagement Consortium. JEF owns shares in about 12-15 Japanese companies with a specific identified potential for increased shareholder value. They work according to a structured process of active governance, which enables monitoring and transparency.

AP4 is also engaged in the GO Japan Engagement Consortium (JEC). Other members of the consortium are TMAM and the English pension funds Railpen (Railway Pension Fund) and USS (University Superannuation Scheme). The consortium conducts, via GO - Japan and TMAM, ownership dialogues with 15-20 major Japanese companies. The work is principally structured in the same way as for JEF, but in contacts with companies it is the names of the consortium members that are presented.

ESG incorporation strategy applied

Impact on investment decision or performance

The Japanese strategies with a focus on active corporate governance have performed well and made a positive contribution to both total return and active return.

14.2. Additional information.[Optional]