The AP funds’ sustainability work comes out well in the National Audit Office’s review
4 June 2021
The AP Funds (AP1-AP4) welcome the review carried out by the National Audit Office during 2020 – 2021 regarding the AP Funds ‘sustainability work and the report presented on 3 June 2021. Sustainability is a very important and integral part of the AP Funds’ work and something that The AP funds have worked for a long time and are constantly developing.
The National Audit Office’s review shows that the AP Funds’ sustainability work is appropriate in relation to the assignment. The review also confirms that the AP funds have established processes and integrate sustainability into investments and corporate governance.
The Swedish National Audit Office makes a number of recommendations regarding sustainability reporting and reporting of key figures. This is not unique to the AP funds, but something the entire industry is working hard on. The report highlights the challenges that the AP funds and all other corresponding investors have, in Sweden as well as internationally, in terms of reporting in a simple and easy-to-understand way the extensive, difficult and complex sustainability work that is conducted.
The review has not compared the AP funds’ sustainability work with corresponding pension funds internationally. McKinsey did this on behalf of the Ministry of Finance at the annual evaluation in 2019. That report shows that the AP funds are at the forefront of sustainability compared with leading institutional investors globally and continue to improve their work in line with the rapid development in the field. Internationally, the AP funds stand out above all through their ownership commitment, but are also at the forefront of integrating sustainability into asset management.
The National Audit Office’s review is carried out in the light of the new legal rules regarding sustainable management for the AP Funds, which entered into force on 1 January 2019. The new rules entail a higher level of ambition in sustainability and it was introduced in the legal text that management must be conducted exemplary through responsible investment and responsible ownership. . The goal must be achieved without the AP funds renouncing the overall goal of long-term high returns. The AP Funds welcomed the introduction of sustainability in the legal text. The AP funds are leaders in sustainable management among pension funds today and the ambition is to be so in the future.
The mission of the AP funds
The AP funds manage the buffer capital in the general pension system on behalf of the Swedish Parliament and the Swedish people for the benefit of today’s and tomorrow’s pensioners. The AP funds (AP1 – AP4) have the same mission and are governed by the Act (2000: 192) on general pension funds (AP funds), but have different management strategies. At the end of 2020, the common fund capital amounted to SEK 1,651 billion. The AP funds balance inflows and outflows to the pension system and have since the start paid in a net SEK 176 billion to the pension system. The AP funds’ assets now make up 16 per cent of the assets in the pension system.
Source: AP1
