Four Swedish AP national pension funds have announced they will drops shares in four companies criticised for their negative environmental and social records.
Following the suggestions of the Ethical Council, the body advising the pension funds on sustainable and responsible investment, the funds have decided to divest from Walmart, Freeport McMoRan, Incitec Pivot and Potash.
“The Ethical Council performed a detailed analysis of the four companies and concluded that AP1-AP4 should exclude them as investment vehicles from their portfolios,” said Christina Kusoffsky Hillesöy, chair of the Ethical Council.
The council justified the exclusion of Walmart by explaining that the US retailer is guilty of “systematic abuses of workers’ rights”. The Freeport McMoRan Copper & Gold Inc. has been accused of seriously damaging the environment in Indonesia with its mining activities, polluting rivers and affecting biodiversity.
Rebuttal of Incitec Pivot Ltd and Potash Corp. is due to their phosphate extraction in the Western Sahara, which is under Moroccan occupation and on the UN list of non-self-governing territories that should be decolonised. The UN said in 2002 that mineral extraction should not take place without the approval of local dwellers.
The council explained that the pension funds initially engaged with these companies with the aim of changing unethical behaviours but it said they were unsuccessful.
“Engagement is the Ethical Council’s primary tool for encouraging companies to act responsibly. Exclusion from the investment portfolio is a last resort when other avenues have not worked. This is therefore a setback for us in so far as we have been unable to secure lasting improvements despite several years of active engagement”, Hillesöy said.
“We do not believe further interaction with these companies will be fruitful and have therefore recommended that the AP funds exclude them from their investment universe.”
In September, the Swedish centre party suggested that AP funds should drop investment in fossil fuels both because of climate change concerns and because they might be financially risky. AP funds had been previously criticised by Amnesty International over investment in companies producing drugs used for executions.