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AP2

PRI reporting framework 2018

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Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the roles present in your organisation and for each, indicate whether they have oversight and/or implementation responsibilities for responsible investment.

Roles present in your organisation

          Head of Communication and HR
        

Other description (1)

          General Counsel
        

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

3 Number

07.4. Additional information. [Optional]


SG 07 CC. Climate-issues roles and responsibilities

07.1 CC. Indicate the roles in your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for climate-related issues.

Roles present in your organisation

07.1a CC. For the board level roles or for which you have climate-related issues oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

The board’s oversight of climate-related risks and opportunities

AP2 is an independent government authority. According to the act that governs the Swedish AP funds’ goals and the overarching frameworks under which they operate are set out by the board in an annual operational plan. The operational plan also includes AP2’s corporate governance policy, which sets out clearly how the fund is to contribute, within the scope of its overall mission, to the favorable development in terms of ethics, the environment and corporate governance of the companies in which it invests. The board decides on the operational plan each year. The Swedish Government appoints the fund’s board members.

The board establishes the strategic portfolio at least once per year as part of the fund’s operational plan. AP2 uses a long-term perspective of 30 years in its strategic allocation. The board is informed about and discusses environmental, social and corporate governance (ESG) issues at each meeting.

AP2 has been working to identify companies with climate-related financial risks since 2013. In October 2014, the first analysis that concerned fossil energy companies was presented to the board, which decided at that time to divest from companies on the basis of criteria set by AP2. The board made a corresponding decision that applied to utility companies in 2015. AP2 follows up these decisions each year using an analysis of whether there are further companies to divest from or companies that are to be reinvested in as they are no longer regarded as having a significant climate-related financial risk. At that time, the board is also provided with an analysis of return pertaining to the divestments. One condition in the AP Funds’ Act is that the consideration given to ethical and the environment concerns may be such that the overall goal of providing a high return at as low a risk as possible to the pension system.

The board decides on all index changes. The data put together by AP2 prior to a decision concerning potential index changes taking place contains an ESG analysis that includes an analysis of how the change will affect the carbon footprint. AP2’s overarching ambition in terms of climate is for the portfolio to be compliant with the two-degree target.

07.1b CC. For the management-level roles which assess and manage climate-related issues, provide further information on the structure and process involved.

Executive management’s role in assess and managing climate-related risks and opportunities

AP2’s Sustainability Group initiates both analysis and follow-up of climate-related financial risks in sectors that are deemed to have significant climate-related financial risks. Fossil energy companies and utility companies are currently being analysed. The Sustainability Group is made up of: the Chief Investment Officer, the Chief Strategist, the Head of Communications & HR and the Senior Sustainability Analysts. AP2’s in-house working group focused in fossil energy and climate-related financial risks conducts market and corporate analyses. This working group is made up of two people from executive management (the Chief Investment Officer and the Head of Communications & HR, who is also responsible for coordinating ESG activities) as well as sustainability analysts and equity analysts. Executive management continually inform the board about the work that is taking place in the field of climate change. There is no single member of executive management who is specifically responsible for climate change, but climaterelated risks and opportunities are included in the Chief Investment Officer’s responsibility. This is because AP2’s overall objective is for sustainability to be an integrated part of all analysis and decision-making processes. The fund is working actively to integrate sustainability into its asset management. Analysis of climaterelated investment opportunities is initiated by the senior portfolio management. When an investment is identified, it is processed in accordance with the fund’s normal investment process.


SG 08. RI in performance management, reward and/or personal development (Private)


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