The environment and ethics

The Second AP Fund works actively to enhance the value of its investments in the
long term. By encouraging portfolio companies to address ethical and environmental issues, the Second AP Fund can help them identify opportunities and risks at an early stage, which can affect long-term return.

If the Second AP Fund has reason to suspect that any of the companies in which it has invested is acting in contradiction of an international convention to which Sweden subscribes, or to which it has expressed an intention of subscribing, the facts shall be investigated. Among other things, this investigation should include a dialogue with the company in question. If the Fund’s suspicions are confirmed, the company will be asked to provide an explanation and to draft an action plan. In analyzing the situation, the Fund shall consider the nature of the contravention and any action that may have been taken (or that may be planned), to ensure that a contravention of this type is not repeated. If contact with the company fails to yield a satisfactory response, the Second AP Fund shall determine whether the company isto be excluded from its investment universe, subsequent to a general assessment. The Second AP Fund may decide to exclude a company if the Fund considers the circumstances to be so serious as to make exclusion unavoidable, even where no convention has been contravened. The decision to exclude a company is always taken by the Second AP Fund’s board of directors.

The First, Second, Third and Fourth AP funds have coordinated their efforts with respect to environmental and ethical issues involving foreign companies in which they have invested by forming a joint Ethical Council. This cooperation is designed to enable a review of the funds’ holdings in companies suspected of being in contravention of international conventions, as well as facilitating analysis of the facts and the establishment of a dialogue with the companies in question. The Ethical Council has an advisory role on matters involving exclusion. The decision to refrain from investment in specific companies as a consequence of ethical and environmental considerations is always taken by the individual fund.