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AP4

PRI reporting framework 2020

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

ESG overall is integrated part in the active managed portfolios where the different portfolios could have different approaches. For AP4, as a long-term investor, sustainability is a hygienic factor. Our business model is based on sustainability being an express part of our management strategy. We believe companies and businesses managed in a responsible way will contribute to lower risk and higher returns long-term.

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

AP4 use for example broad implementation of risk-mitigation strategies in AP4’s portfolio. AP4 applies low-carbon strategies in global equities, entailing that AP4 reduces its exposure to the companies in each sector that have high CO2 intensity or fossil fuel reserves. Dedicated allocation to investments that benefit from or play a leading role in prioritised areas. AP4 searches actively and has made a number of investments focused on contributing to or benefiting from the shift to a low-carbon economy that is currently taking place. Using ownership dialogues with complanies to discuss issues and to promote ESG. Using ownerships rigts to vote. Participating in different collaborations concerning ESG.


LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

02.2. Indicate whether you incentivise brokers to provide ESG research.

02.4. Additional information. [Optional]


LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate whether your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]

Depending on investment team and asset class, there are different ways of information processes, for example weekly meetings and ad-hoc information meetings depending on the issue. 


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

AP4 has some sectors, products and ESG related issues where we either exclude companies or just do not invest in. We do the screening to ensure that we are not invested in those companies.

Screened by

Description

AP4 has some sectors, products and ESG related issues where we do positive screening to be able to find companies that could benefit from change in behaveor from costumers.

Screened by

          International conventions that are signed by the Kingdom of Sweden.
        

Description

This is mainly in regards to the international conventions that are signed by the Kingdom of Sweden, such as nuclear weapons, cluster munition and land mines.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

NA, but the fund makes the changes public on our web site.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.5. Additional information. [Optional]

By bi-annual screening of the portfolio and heads ups by weekly uppdates.


LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

06.2. If breaches of fund screening criteria are identified, describe the process followed to correct those breaches.

Immediate action to correct the breach and analyse of what happend. Evaluation of routine and routine description. and if needed, updating the routine/process. Implementation of identified changes, if any.  

06.3. Additional information. [Optional]


(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

AP4 aims to integrate ESG in all investment processes. For example to lower the funds exposure to CO2 and take into consideration other ESG factor related issues. This is done both in internally managed portfolios (both semi-active and active) as well as in externally managed portfolios.


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

AP4 screens the portfolio in regards to different factors as well as for different issues, and when needed continue with deeper research


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

09.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your integration strategy.

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.5. Describe how ESG information is held and used by your portfolio managers.

          On data base for relevant parties and by the portfolio managers as a part of the overall research.
        

09.6. Additional information. [Optional]


LEI 10. Aspects of analysis ESG information is integrated into

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

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis.

10.3. Describe how you integrate ESG information into portfolio weighting.

ESG factors is a part of the general company analysis.

10.4. Describe the methods you have used to adjust the income forecast/valuation tool.

ESG factors is a part of the general company analysis.

10.5. Describe how you apply sensitivity and /or scenario analysis to security valuations.

ESG factors is a part of the general company analysis.

10.6. Additional information. [OPTIONAL]


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