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Swedish Public Funds Drop Stocks over Ethics Concerns

Chief Investment Officer
April 9th, 2015

The Ethics Council, formed by four of Sweden’s national pension funds, has excluded three companies from investment portfolios after deciding further dialogue over their concerns would be fruitless.

The AP funds one to four have excluded Agrium, Motorola Solutions, and Barrick Gold from potential future investment as they “all have been associated with violations of international conventions”, the council’s annual report stated.

Combined assets of the funds is more than SEK1 trillion (€100 billion).

“The Ethical Council has for several years been working with preventive dialogues in order to get companies to act more responsibly and thus reduce the risk that they violate international conventions,” the report said.

The group took separate issues with these three companies.

“The Ethical Council has recommended exclusion of Barrick Gold due to serious negative environmental impact by depositing tailings in river system,” the report said. “The recommendation to exclude Motorola Solutions is based on their involvement in customized monitoring systems for settlements in the occupied parts of the West Bank and finally the company Agrium that intends to continue to buy and use phosphates from the occupied Western Sahara.”

During 2014, the council held 308 dialogues with international companies, which resulted in just these three being excluded. Incoming 2015 Council Chairman Ossian Ekdahl said this was encouraging.

“Preventive and proactive projects are important for the Ethical Council and it is important that these lead to concrete and positive results. Engagement makes a difference,” said Ekdahl.

The 2014 report details the results of successful dialogues with companies, including engagement with Nike over working conditions in some of its Asian factories and the mining industry more generally on human rights and environmental issues.

“Reactive, event-driven dialogues will always be a part of the council's work, but preventive projects are often a better way to achieve change where the companies are more receptive to suggested improvements, in order to avoid future problems,” Ekdahl concluded.

For an in-depth view into how European investors are pushing forward with sustainable innovation, pick up the next edition of CIO Europe.

 

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