Taking into account sustainability factors in analysis and decision-making processes means integrating sustainability into the asset management. In this way, the Fund can also reduce the risk and create better conditions for an increased return. Andra AP-fonden’s view is that long-term sustainable companies also generate good returns in the long term.
The Fund’s fundamental conviction is that companies with long-term sustainable business models generate a higher longterm value for their shareholders. Such investments are also, other things being equal, less risky. Companies which integrate factors such as ethics and environment in their long-term business development will have a real advantage over their competitors and better able to create long-term value for their shareholders. A proactive approach to the environment, ethics, social issues and corporate governance are means to attain the goal of a good risk-adjusted return.
The form of the integration depends on the conditions that are in place for each individual asset class and decision process.
During the year AP2 developed a new sustainability strategy based on the Fund’s six sustainability principles. One of the principles is that AP2 integrates sustainability in all investment processes. According to the principle, sustainability shall be an integrated part of all investment processes. The form of the integration depends on the conditions that are in place for each individual asset class and decision process.
The departure point for integrating sustainability is by improving the possibilities for overall goal attainment. This can either be done by improving the expected return, by minimising the risk or by promoting sustainable development without sacrificing the risk-adjusted return. The objective is that the expected return increases while the risk is reduced, while a sustainable development is also promoted. Integrating sustainability is a continuous process rather than a goal that can be completed by a given date.