Sweden's AP funds will extend their engagement efforts in 2023 to cover domestic equities and bonds, AP Funds' Council on Ethics said Thursday.
"The council will continue to screen foreign-listed shareholdings and, in addition, Swedish listed shareholdings and credit investments as well," Pia Axelsson, AP4's manager for corporate governance and information and the 2022 chairwoman of the council, said in a news release.
"Both directly owned and indirectly owned holdings through fund investments will be screened, with the objective of identifying companies deemed to violate international conventions to which Sweden is a signatory," she added.
The council represents the sustainable efforts of AP1, AP3 and AP4, Stockholm, and AP2, Gothenburg. The pension funds have about $170 billion in combined assets.
Through its reactive engagement, the council aims to influence the funds' portfolio companies to implement sustainable policies and transparent disclosure.
In 2022, the council said, the four Swedish funds engaged with 86 companies in an attempt to rectify ongoing human rights, corporate governance and environmental issues. More than half (60%) of engagements were required due to suspected human rights violations.
Among the total of 3,200 of companies screened for violating international conventions, 16 new engagements were initiated.
But the AP funds also managed to achieve improvements in child labor cases, the council said.
"Significant progress has been made toward the goal of reducing child labor in cocoa farming, and eventually eliminating it altogether. The focus of the project has been to ensure that children in cocoa-growing communities receive education, to ensure systems for identifying and remedying child labor (are in place) and to enable cocoa farmers to earn an adequate living. Challenges still remain, but in all these areas we can confirm that major improvements have been made," Ms. Axelsson said.
In 2022, the council also assessed around 100 companies regarding their climate-based reporting, seeking to install greater transparency in line with the climate reporting standards of the Task Force on Climate-related Financial Disclosures.