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Sweden’s AP2 divests from tobacco and nuclear weapons

Andra AP-fonden is one of five buffer funds in the Swedish pension system and has assets under management of €31.2bn


David Robinson

Andra AP-fonden (AP2), one of the largest pension funds in northern Europe, is withdrawing investment from around 60 tobacco and nuclear weapons companies.

AP2 is one of five buffer funds within the Swedish pension system and has assets under management of SEK 334.8bn (€31.2bn).

The fund said the move was part of efforts to integrate sustainability into its portfolio management.

“AP2’s sustainability work is based on the conviction that it leads to an improved management return, thereby making a positive contribution to the Swedish income pension system and for pensioners,” the group said in a statement.

New governance rules

In January, new investment rules regarding sustainable asset management for the AP state pension funds came into effect. According to the act, the AP Funds must manage their assets in an exemplary way through responsible investments and responsible ownership. The new regulations entail a higher level of ambition for the AP Funds’ sustainability work.

“In line with the requirements of the new legislation, AP2 has analysed the conventions that are aimed at restricting the use, scope or distribution of certain products or businesses over time. The fund has evaluated the need for a changed approach based on the underlying purpose of the international conventions,” the group said,

“With the support of the new regulations regarding exemplary management, AP2 has divested from tobacco companies and companies involved in the maintenance and modernisation of nuclear weapons systems.

“The divestment from tobacco companies is in line with the intention of the convention on tobacco control: a sharp reduction in tobacco consumption and the harmful effects of tobacco smoke.

“Divestments from companies that are involved both in the maintenance and modernisation of nuclear weapons systems are aligned with the intention of long-term disarmament of nuclear weapons in all countries as expressed in the Non-Proliferation Treaty (NPT). AP2 has previously excluded nuclear weapons companies that operate in countries that are not allowed to have them according to NPT.”