Third Swedish National Pension Fund, also known as AP3, released the framework it will use for assessing how companies and countries impact human rights.
AP3, one of five funds that manage capital on behalf of the Swedish state pension system, had SEK 491.5 billion ($45.4 billion) in assets under management as of June 30.
Human rights are one of four sustainability focus areas AP3 is developing this year, in addition to climate, corporate governance and biodiversity. Its climate action plan was released in March.
In an Oct. 12 announcement, AP3 said it will invest in companies and sectors with high risks, "provided that the companies are deemed to have the ambition to manage human rights."
The first step in the process is assessing countries based on parameters such as democracy, respect for human rights, freedom of expression, principles of the rule of law, the judiciary and corruption.
Step two is ongoing screening of the fund's portfolio to identify which companies are possibly at risk of violating human rights, to ensure they "pursue ambitious work with clear goals themselves," AP3 said.
AP3 also participates in several collaborative initiatives to address human rights for investors, including the Investor Alliance on Human Rights and PRI Advance.