Reporting of the AP funds' operations up to and including 2021

Joakim Sandell (S)

Report on the activities of the AP funds up to 2021

Madam Speaker! Today we are to debate the reporting of the AP funds' operations up to and including 2021, and I wish to begin by moving for approval of the committee's proposal in the report and rejection of the reservation.

In a debate about the AP funds and their results, it is central to remind what their mandate actually is: to manage the fund assets so that they become of the greatest possible benefit for the income pension system. The management shall take its starting point in the pension system's commitment. The mandate is regulated by law and constitutes, together with the investment rules, the framework for the AP funds' work. From the investment rules, one can read, among other things, that the funds are required to take into account environment and ethics in the investment activities, without compromising the overall goal of high returns. The funds shall not have industrial policy or economic policy goals.

Madam Speaker! When we look at the results of the AP funds, it is good to keep in mind that the matter concerns 2021 and not last year. The year 2021 was characterized by a very strong stock market, which is not the case for last year. This naturally meant that the AP funds' return during 2021 became historically high. The buffer funds' total result was a full 338 billion after costs. Of those, 30 billion were transferred to the pension system to secure the ongoing pension payments.

Madam Speaker! On 1 January 2019, the First-Fourth AP fund received a new objective for its investment activities: that the pension capital shall be managed in an exemplary manner through responsible investments and responsible ownership. The overall objective is, however, still high return at low risk. From 1 July 2022, this also applies to the Sixth AP fund.

The purpose of the goal is that the funds shall take environmental aspects, social aspects, and corporate governance aspects into account in their capital management. The goal implies, among other things, that the funds shall develop a common set of values for the management, common guidelines for which assets pension funds should not be invested in, as well as common guidelines for how the results of the management according to the goal shall be reported.

Regarding the Seventh AP Fund, a new law came into force on January 1 of this year. The law implies, among other things, that a sustainability goal is introduced for the fund's management, which means that the management shall be conducted in an exemplary manner. Special weight shall be attached to how a sustainable management can be promoted.

In conclusion, Madam Speaker - that the AP funds manage our pension money in a sustainable way is something we need to constantly keep under scrutiny and evaluate. The AP funds' overall goal is long-term, high returns to ensure secure pensions for Sweden's wage earners. The long-term perspective will mean that, for example, fossil investments will be phased out.

I really want to emphasize the importance of ensuring that the AP funds' compliance is closely monitored. Managing our pension money is a great responsibility. Therefore, the investments need to be long-term sustainable so that we have secure pensions that the bus driver and the nurse can live on.

I am also convinced that there is a strong expectation from the savers that the pension funds managed by the AP-fonderna go to good businesses and not to businesses that, for example, violate human rights or destroy our planet. Therefore, we Social Democrats do not rule out further changes to the regulatory framework if it should prove necessary.

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Ilona Szatmári Waldau (V)

Madam Speaker! In this speech, I will primarily focus on the AP funds' sustainability work. What we can see is that the sustainability work is purposeful according to the directives that the AP funds have received. At the same time, we can see that the AP funds' mandate is not sufficiently clear when it comes to the sustainability work.

At the same time as holdings in certain fossil activities are divested, shares in other companies engaged in fossil activities are purchased. For example, it was an AP fund that during 2021 purchased more shares in blacklisted companies, according to a review that Sveriges Radio published last year.

We can also see how the AP funds interpret the sustainability mandate differently. While some companies have sold their holdings in companies involved in the production of nuclear weapons, one of the funds chooses to retain such holdings. While some AP funds have divested their holdings in fossil activities, there are some that retain their holdings and even increase them.

The AP funds have investments in companies involved in fossil gas projects that are assessed to have major consequences for the climate and the marine environment and involve forced displacement of local populations. Another investment that an AP fund has is in a company that owns a coal mine that has been reported to the OECD for human rights abuses and for environmental destruction. By purchasing government bonds, the AP funds also lend money to several dictatorships. The list of unethical and unsustainable investments can, of course, be made longer than that.

All AP-funds thus have the same guidelines when it comes to sustainability, but they interpret them differently. Some divest all holdings in companies in the fossil industry while others reinvest because they believe they can influence the companies from within.

A representative for one of the AP funds that argues that one can influence from within wrote a debate article in the autumn on this. I quote from that article: It is "concerning that so many opinion leaders consider that sustainable investors should avoid companies that are deeply rooted in the fossil economy. It is by us as owners setting requirements that we can force changes."

Just this AP-fund has holdings in the Saudi state-owned oil company Saudi Aramco. It is the world's largest fossil fuel company and also the company that has emitted the most carbon dioxide in history. How can a Swedish AP-fund set requirements that drive changes in a Saudi state-owned oil company? How have the AP-funds that have or have had holdings in companies that have committed crimes against international law influenced, and how does one influence dictators by buying government bonds? I asked these questions at the committee's public hearing but received no satisfactory answers.

I mean that we must set tougher requirements for all AP funds when it comes to the environment and ethics. Investments in, for example, the Saudi state's oil companies should not be a possible option. The requirements must also be clear, so that the AP funds cannot interpret the mandate differently and consider that it is by buying and holding shares in the fossil industry that they contribute to reaching the climate goals.

Vänsterpartiet has, in a number of motions, presented proposals on how the management of the AP funds can become more sustainable. We have proposed that environmental and ethical considerations should be equated with the goal of high returns, that the funds should not make any new investments in coal, oil, or fossil gas, that the funds should divest existing holdings in the fossil industry, that the funds should have quantitative targets for investments in renewable energy, and that the funds should not invest in companies that use tax havens to avoid taxation.

There is no contradiction between making sustainable investments and achieving a high return. This has been shown, among other things, by companies that have divested shares in fossil activities.

Madam Speaker! Reality shows that the regulatory framework for all AP funds needs to be tightened. I therefore move for approval of the reservation that the AP funds shall not invest in companies that actively engage in lobbying for the fossil fuel industry and against climate commitments.

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Ida Drougge (M)

Madam Speaker! I would like to begin by moving for approval of the committee's proposal for a decision, namely that the Riksdag shall submit the government's communication regarding the AP funds' operations to the records, and for the rejection of the motions.

In this matter, it is important to remind oneself of what is the purpose and task of the AP funds in the income pension system. During the last decades, especially since the 40s generation began to retire, the revenues from the fees have decreased while the expenses have increased. It is then that we need our buffer funds, the First-Fourth AP fund and the Sixth AP fund, to make payments to cover the losses. The purpose of the AP funds is precisely to cover future losses, and we shall of course be able to make reinvestments in them at times when the pension system has more revenues than expenses.

We Moderates and a broad majority in the Committee on Finance share the government's assessment that the funds have so far fulfilled precisely these purposes in the pension system. They contribute positively to the long-term financing of the entire income pension system. They can do this while promoting sustainability and maintaining a low risk. The Committee makes no other assessment here than the government.

The return on capital - and one must remind oneself that it concerns the year 2021 - was historically high and amounted to a full 20.2 percent. This is significantly higher than the average annual return has been since 2001. It has stood at 7.1 percent. Overall, the buffer funds could therefore transfer 30 billion to the income pension system, while the funds' capital increased by 308 billion kronor.

I would also like to conclude by pointing out that it is very positive that the requests that the Committee on Finance has made in previous years have yielded results, especially when it comes to the fact that the funds' management costs have also decreased. Furthermore, we can also see good results in the area of sustainability, particularly also in the reporting of the sustainability work that is being conducted.

When the National Audit Office reviewed the AP funds' activities in the area of sustainability, they came up with a number of recommendations, both for the funds and for the government. This is the first time that we have an addition regarding sustainability work in general in this report. This is positive. We Moderates believe that it is crucial that we have transparency and clear reporting of the AP funds' activities. These are important methods for us to evaluate their work.

They are important methods, especially because we want to preserve the funds' independence and keep them away from political discussions and emotionally charged arguments. And we want to be able to maintain a long-term perspective in these funds.

We know that what is controversial one day is not the next and that the state of knowledge changes. Keeping the funds at arm's length from politics is therefore wise. But then – especially then – one needs to have good tools to be able to evaluate the funds and have transparency in their work. It is positive that that work has now been initiated and developed.

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Martin Ådahl (C)

Madam Speaker! I first want to agree that our buffer funds in the pension system, the AP-funds, basically function well. It is good that we have maintained the system with different funds, with different investment strategies, which thereby reduces the risk of large incorrect decisions and increases the chance that good investment strategies are rewarded.

Through many of the crises that have hit the world economy and the market, the AP funds have delivered good returns, better than the market as a whole, at reasonable costs. It is however important that the AP funds continue to work when it comes to efficiency and keeping costs down.

It is also good that the AP funds have had a well-developed work with sustainability for over a decade. I really want to pay a tribute to the pioneers who led that work. This is expected by the Swedish public, but it is also a good indicator of corporate governance, how one manages its companies. Climate work, in fact, goes hand in hand with how well one manages companies, according to many studies.

However, here I want to say something about the dilemma the AP funds grapple with regarding the climate issue. The AP funds have an exceptional long-term perspective. They also have an exceptional need to spread risks, even globally. Here, there is a kind of moment 22.

Pension funds that have holdings in companies that are dependent on fossil energy can end up in a situation where the value of the fossil assets is maximized by simply using the oil, gas, and coal. But then the value decreases, due to the risk that the climate issue poses for the rest of the economic system, on all the other assets and on the standard of living generally for the pensioners. The other alternative is that we politicians make the right decisions so that one cannot burn the oil, gas, and coal. Then these assets lose in value, and the pensioners lose money.

The only way to get out of this Catch-22 for a pension fund is to somehow hold these assets long enough to maximize the money and then sell them dearly to someone else, like a hot potato. It is not a sustainable strategy for a pension fund. That is why pension funds, private and public, all over the world are now moving away from the fossil fuels as a revenue base. The AP funds have also done this. It is good that one now continues to reduce the climate risks, even though the Third AP Fund unfortunately increased them slightly during the last year. It is also good that a review of the ethics council for the pension funds is now taking place.

But by reason of this letter regarding the management of the AP funds, a part of the sustainability work is nevertheless highlighted which should be even more obvious than the "Catch-22" regarding the fact that one cannot have fossil fuels without putting pensioners on the edge. This is about the fact that a number of the companies that one owns engage in direct political lobbying to prevent climate work and to ensure that more fossil fuels are burned and that this shall be fueled.

Here, the companies, which Swedish pensioners indirectly own via the buffer funds, contribute to actively worsening the conditions for those same pensioners generally and the return on other assets. It is also a sign of poor governance, as I was mentioning. Companies are not well-managed when they spend millions and in some cases billions on climate lobbying against the climate issue.

Reporting of the AP funds' operations up to and including 2021

There is available information in many Western countries regarding which companies carry out what lobbying and towards which companies. There are many registers. There are also organizations that monitor this specifically, because it is important and crucial for the climate issue, which we work with.

It should therefore be not only possible but also obvious that we who have to oversee these funds in the sustainability work include that one shall not work politically against sustainability among the companies that are owned. It is not in the principals' interest - that is to say the Swedish people's and Swedish pensioners' interest - that their money against their will goes to lobbying against climate measures and to spreading lies and disinformation about the climate crisis. It is in their interest, economically and morally, that the pension funds have a handle on this and counteract it.

I find it difficult to see why this chamber would actually oppose this. Therefore, Madam Speaker, I move for approval of the Centerpartiet's reservation under point 2.

The deliberation was hereby concluded.

(Decisions were made under § 12.)

The best interests of the child in continued care according to LVU

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