How we exercise active ownership
At AP Pension, we regard responsible conduct as a necessity for the well-being of our society and also believe that irresponsible operations can have an adverse effect on the long-term return of our invested pension funds.
As a pension company, we believe it is our duty to exercise our influence, and we also want to contribute to the companies in our portfolio moving in a more responsible direction overall. We do this by exercising “active ownership”, where we monitor companies’ conduct on an ongoing basis and engage in dialog with them to ensure they live up to our policies and principles.
Read our Active Ownership Policy (Danish content only)
If AP Pension becomes aware of conduct that contravenes our policy, we can employ various means. In the first instance, we engage in dialog with the company or exercise our influence at the companies’ general meetings. If the company continues without making any changes to its conduct, it may be excluded from our investment universe and placed on our exclusion list, after which we sell off our holdings in the company. We see this as a necessary consequence in order for us to have a portfolio that reflects our ambitions for responsible practice.
When do we engage in dialog?
At AP Pension, we believe that dialog is the most effective tool for promoting responsible conduct and ensuring the best possible long-term return on the invested pension funds.
The need to engage in dialog arises when we become aware of conduct that is contrary to our responsible and sustainable investment policy. In practice, our investments in listed shares and corporate bonds are screened on an ongoing basis in partnership with an internationally recognized and independent adviser who specializes in active ownership and responsible investment.
Our portfolios are screened for potential violations of our responsible and sustainable investment policy, and violations of the international principles of responsible business conduct, including:
- UN Convention on Civil and Political Rights
- UN Convention on Climate Change
- International Covenant on Economic, Social and Cultural Rights
- Geneva Convention
- UN International Labor Organization
- The Rio Declaration on Environment and Development
- UN Convention on Biodiversity
- United Nations Framework Convention on Climate Change
- Paris Agreement
- UN Convention Against Corruption
- OECD Guidelines for Multinational Enterprises
- UN Guiding Principles on Business and Human Rights
If, in connection with the screening process, conduct is identified that conflicts with the established principles, we enter into dialog with the companies via our external adviser – generally in partnership with other investors to increase the likelihood of influence – with the aim of influencing the company in the desired direction. It is our view that you have the best possible conditions to influence a company’s conduct if you initiate the dialog at an early stage.
In addition to direct dialog with the companies through our external adviser, we partner with a wide range of other investors, for example through membership of the PRI, Institutional Investors Group on Climate Change (IIGCC), and Climate Action 100+.
Find out more about our partnerships
AP Pension dialog list (Danish content only)
Voting at general meetings
At AP Pension, we also exercise active ownership by voting at the companies’ general meetings. We do this on an ongoing basis in all the companies in which we have invested. In practice, this is done by our external adviser exercising proxy voting, which means that the adviser is granted power of attorney to vote on behalf of AP Pension.
When a vote is to be cast at general meetings, our external adviser handles the casting of the vote itself and votes on behalf of AP Pension. As a rule, voting is automated and follows a predetermined voting policy. This voting policy is based on recommendations from ISS ESG specialists, who conduct extensive research on each proposal for each general meeting with a focus on sustainability. This means that, as a starting point, we will vote in line with ISS’s recommendations if this is considered sustainable.
We always have the option of voting ourselves at general meetings, for example in the case of matters of principle, or where voting is considered a useful tool for escalating active ownership vis-à-vis a company in addition to regular monitoring and dialog. This means that if ongoing dialog has not led to the desired goal being achieved, we can, among other things, use voting and the preparation of shareholder proposals at general meetings to increase the possibility of influencing a company to act in accordance with international principles of good corporate governance and our policies.
In February 2022, for example, at the general meeting of oil company Shell Plc, we voted against their proposal for a new climate plan, as we did not think it was ambitious enough. We believed among other things that their climate plan lacked details on climate goals in line with the IEA net zero pathways. This is just one example of many where we actively take a stand on the companies in our portfolio to send a clear signal and influence these companies towards a more sustainable future.
The proxy voting agreement covers all the companies in the investment portfolio for which we have voting rights, and covers both internally and externally managed portfolios. You can see which general meetings we voted at and how the votes were cast below.
See our voting policy and proxy voting
We have also invested in some funds where we do not have voting rights.
See list of funds here (Danish content only)
We are not involved in stock lending and will therefore not experience scenarios in which loaned stock has to be recalled in relation to voting at general meetings.
Find out more about AP Pension’s exercise of active ownership
You can find out about how active ownership has been exercised in the past year in AP Pension’s annual CSR report. You can also find out more here about the processes we have in place to comply with our active ownership policy, and how we work on sustainability and responsibility across AP Pension’s business activities.
AP Pension’s Sustainability Report 2023 (Danish content only)
Position statements
You can find out AP Pension’s position on selected topics in relation to our investment decisions in the PDFs below.
Please aware that all statements are in Danish