Swedish pension fund collaboration to influence local market

Four of Sweden’s national pension funds (AP1-4) have collaborated with another nine investors to form the Swedish arm of The Sustainable Value Creation, and have already begun surveying the top 100 companies on the NASDAQ OMX Stockholm regarding their governance policies and sustainable value creation.

The Sustainable Value Creation, a group already formed in Norway last year, is aimed at influencing the sustainable development of corporations listed on the local market.

The first action of the investor collaboration has been to survey the largest companies in Sweden and on the Oslo Bors Benchmark Index in Norway, on their policies regarding sustainable value creation, including human rights, labour rights, environment and corruption.

The survey, which has a deadline of October 9, addresses four main areas: the companies’ steering policies and commitments; implementation and adherence; communication and reporting; and board accountability. A publicly available report will be available in early 2010.

The first four buffer funds in the national Swedish pension system have a history of collaboration, having previously formed the Ethical Council to combine resources and votes to increase their influence on foreign companies they invested in. The ethical council coordinates SRI analysis of environmental and ethical compliance of the companies.

The Swedish investor group that forms the Sustainable Value Creation has total assets of SEK 3,800 billion ($547 billion) while the group of nine Norwegian investors have a total of NOK 2,500 billion ($425 billion).

One of the key findings of the recent UNPRI annual assessment of signatories was signs of a growing culture of active ownership and collaboration among investors in response to the financial crisis. The Sustainable Value initiative is a good example of this collaboration.