AP3 maintaining high ambitions in a challenging world

The Stewardship Report uses key performance indicators and also examples to show how AP3 has continued to work with great commitment on the fund’s four focus areas, which are human rights, climate, biodiversity and corporate governance.

Fredric Nyström, Head of Sustainability & Governance, comments:

“We believe in the power of active stewardship in an uncertain world. We are living in a time of climate change, geopolitical turmoil, increased threats to our security and shifting trade flows and market conditions. This places new demands on both companies and investors, in terms of their ability to adapt and also to remain steadfast in their committed to long-term sustainability.”

Active stewardship
AP3 had a high level of activity during the 2024–2025 AGM season. The fund voted on a total of 15,734 motions at 1,066 annual general meetings.

[LJ1] During the year, AP3 abstained from or voted against motions proposed by foreign management teams or boards of directors when these did not meet AP3’s high standards for a robust climate transition. This also applied to politically sensitive areas such as diversity, equity and inclusion.

Direct or indirect dialogue was conducted with 57 per cent of the companies in the fund’s equity portfolio, including 326 companies regarding climate-related issues, 188 companies regarding biodiversity and 76 companies regarding human rights. Corporate governance issues, i.e. incentive plans, board representation and gender equality, were addressed in dialogues with 62 companies.

In addition, the fund engaged in dialogue with eight mining companies to persuade them to adopt a global standard for waste management and take responsibility for the negative impact of their operations on local communities.

Decline in sustainability efforts – a concerning trend

In the US, minority shareholders’ rights are currently under attack, as a result of changes that risk favouring corporate management teams and large shareholders at the expense of minority shareholders. Motions have been submitted that would make it more difficult for them to submit their own motions at general meetings, on the grounds that they do not have a link to long-term value creation.

“During the year, we saw several indications of a decline in sustainability efforts,” says Fredric Nyström. “Major asset managers, particularly in the US, have backed away from previously announced climate ambitions. ESG is increasingly not being mentioned in investment strategies, as a response to there being a new political and media landscape.”

Large passive index managers constitute a potential threat to the Swedish governance model. Although they are often the largest shareholders in companies, they rarely participate in work involving nominations. They can also vote against the nomination committee’s proposals without giving any reasons for this, and vote against discharge from liability purely as an expression of dissatisfaction.

“When investors take an active interest, companies are more likely to improve their human rights performance. Advocacy dialogues conducted by the Investor Alliance for Human Rights (IAHR) network, of which AP3 has been a member since 2022, have had a noticeable impact,” says Fredric Nyström.

AP3’s efforts are paying off

In its Stewardship Report, AP3 presents clear progress in its focus areas:

• The work to achieve net zero by 2045 is progressing. Of 53 prioritised companies, 29 have now set science-based climate targets, and 22 have climate targets aligned with a temperature increase of less than two degrees.
• Of the incentive plans proposed at Swedish AGMs during the year, 43 per cent included sustainability requirements, which means that AP3’s target in this area was met.
• Boards of directors are becoming more gender-balanced in Sweden, and efforts to improve this aspect are ongoing.

The boards at 63 per cent of Swedish companies now have a gender balance (i.e. at least 40 per cent of the underrepresented gender).

The Third Swedish National Pension Fund, AP3’s sustainability efforts form the basis for long-term value creation and aim to contribute to sustainable development within the context of the fund’s assignment relating to the state income pension system. Active stewardship is a prerequisite for managing pension capital in a good and responsible way.

Please see the full Stewardship Report 2025 and the Appendix on the Swedish AGM season, which provides concise information about the Swedish companies. 

For any further questions, please contact:

Fredric Nyström, Head of Sustainability & Governance fredric.nystrom@ap3.se

Lil Larås Lindgren, Head of Communications, lil.lindgren@ap3.se