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AP2

PRI reporting framework 2018

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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

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.

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

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

AP2's strategy is based on a step-by-step approach to value generation: choice of strategic asset allocation, selection of index and active management. This approach is based on a set of principles, or Investment Beliefs. These describe the Fund's view of how capital markets function and the opportunities and potential they present for generating a return on investment. One of the beliefs states that value can be both protected and created by being a responsible asset owner and asset manager.

AP2's vision of providing 'world-class asset management' can only be achieved if sustainability is integrated into the management. This is because sustainability issues are important to social development and future economic development and thus also to the fund's capital returns.

AP2's climate ambition is to develop our portfolio in line with the two-degree target. This is achieved by integrating climate analysis into the investment process and by, based on the fund's mission, contributing to the transition into a two-degree society.

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]

AP2's governance policy includes ten investor principles. These principles comprise structural matters, corporate governance, the environment - and ethics. The policy also defines AP2's core values and details the guidelines and initiatives to which AP2 is a signatory, or which it employs in pursuing its sustainability aims.This governance policy clarifies what AP2 expects of its portfolio companies, as well as what these same companies may expect of AP2 as an investor.


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.

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.

The handling of conflicts of interest in connection with corporate governance by the asset manager is a key topic. As an independent state-owned institutional investor, AP2 is not subject to the same potential internal conflicts of interest as other players. Should such arise, however, they are addressed in three stages. Once a conflict of interest has been identified, the Fund’s CEO determines the action to be taken in the specific case. In conflicts of interest of special significance, or in cases where the Fund’s CEO is personally closely involved, the decision is delegated to the Chair. Conflicts of interest are reported to the board and, if of particular significance, are published on the Fund’s website.

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

          All companies included in the Second AP Fund’s portfolio of public equities are screened twice yearly, to identify those that contravene international conventions and guidelines. This analysis is conducted by an external supplier and provides the basis for dialogues conducted by the AP Funds Ethical Council. For more info see: www.ethichalcouncil.com 

Since a few years back AP2 external manager are required to report of if any material incident.
        

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