Swedish Pension funds AP1-4
AP1-4 are four of the six state-owned pension funds in Sweden. Sweden’s pension system has two tiers: five buffer funds and a premium pension system. The five buffer funds (AP1-4 and AP6) work on a pay-as-you-go system in which current pension contributions pay current income pension benefits. These buffer funds should provide spare capital for when state pension funds payments exceed tax revenues, when an ageing population increases demands on the pension system.[i]
On 1 January 2007, the Ethical Council was established for the National Swedish Pension Funds. This committee monitors and analyses the portfolio holdings of AP1-4 Funds to ensure that portfolio companies are not a party to crimes against international conventions to which Sweden is a signatory.[ii] AP1-4 only excludes investments in companies producing nuclear weapons for states that are not signatories to the Non-Proliferation Treaty.[iii]
The exclusion policy applies to all assets managed by AP1-4. External asset managers are also required to comply with the policy.[iv]
AP1-4 currently does not have a publicly available exclusion list, but the Ethical Council has a public list with recommendations for exclusion which is followed by all four funds. This list includes the following companies active in “aerospace and defence”: Elbit Systems Ltd; L-3 Communications Hlds, Inc; Orbital[v]; Singapore Technologies Engineering, and Textron Inc.[vi]
AP1- 4 were found to hold below the threshold investments in several identified nuclear weapon producing companies.
We commend AP1-4 for adopting a public policy on nuclear weapons. We recommend AP1-4 apply its policy to all nuclear weapons producing companies, regardless of their country of origin. We recommend that AP1-4 divest from the nuclear weapon producing companies in which it holds shares and bonds. We look forward to engaging with AP1-4, so a strong and comprehensively applied policy may be listed in the Hall of Fame in a future update of this report.
AP1-4 have a leaky policy on nuclear weapons. Tell them to fix it!Read the petition
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Congratulations AP1-4. I saw on www.dontbankonthebomb.com that you have a policy limiting investments in nuclear weapons. I think it’s really important that you share my concern about these weapons, and I appreciate that there is a public policy.
However, the policy does have some loopholes and the Don’t Bank on the Bomb report shows how you still might invest in nuclear weapons producers. I am concerned about this, because AP1-4 also invests my money and I don’t want to be associated in any way with the production of these inhumane weapons.
It would be great if AP1-4 made the following change to make the policy airtight:
• Apply the policy to all nuclear weapons producing companies, regardless of their country of origin.
With kind regards,
[ii] Ethical Council, “Cooperation And Active Engagement, Annual Report 2014”, p.5, available at http://media.etikradet.se/2015/04/150320-Etikr%C3%A5det-ENG-ver2.pdf, viewed 30 October 2016.
[iii] Ethical Council, “”Nuclear Weapons”, website Ethical Council (http://etikradet.se/etikradets-arbete/positioner/karnvapen/), viewed 30 October 2016.
[iv] AP1-4, written response to PAX dated 18 May 2015.
[v] Orbital has merged with Alliant Techsystems in 2014. The new company is known as Orbital ATK.
[vi] Ethical Council, “Companies that have been recommended for exclusion”, website Ethical Council (http://etikradet.se/etikradets-arbete/reaktiva-dialoger-vid-krankning/rekommenderade-uteslutningar/?lang=en), viewed 30 October 2016.