Swedish pension fund AP7, Stockholm, will place "extra focus" at 2023 annual meetings on holding corporate boards responsible for having credible climate action plans, it said Tuesday.
The pension fund, with 900 billion Swedish kronor ($86.6 billion) in assets, votes at more than 4,000 company meetings each year. In 2022, it tightened its voting policy for companies targeted in the Climate Action CA100+, the world's largest corporate greenhouse gas emitters, and for companies significantly underperforming according to the Transition Pathway Initiative Management Quality score.
This year, "we have further strengthened our expectations and will vote against core agenda items at high emitting companies which are not showing sufficient progress towards the climate transition," the statement said. Unless there are significant and credible signs of improvement, "we will mark our dissatisfaction by a vote against the most relevant board member or against approval of the financial statements at the company," AP7 said.
Those potential negative votes could be based on whether companies have proper governance on climate change, adequate due diligence of climate lobbying activities despite investor engagement, credible medium-term emission reduction target, and high risk of deforestation in their supply chain.
AP7 said it will also support ongoing investor engagement for Net Zero Accounting practices and vote against auditors, accounts and board members at the companies where engagement has resulted in insufficient progress.
