A systematic process

The four AP Funds that are members of the Council on Ethics invest globally in diversified portfolios of several thousand companies. A large proportion of the assets of the Funds are passively managed, which means that the Funds have a wide spread of ownership, with relatively small stakes in a range of companies. Obviously, the Council on Ethics does not have the resources for active management in all of the holdings. The Council therefore applies a systematic process for identifying where active management will reap the greatest benefit. The process helps us to ensure a good spread of issues, geographical locations and assets, so that not all of our work is derived from the same industry or relate to the same issues.

Information from a number of different sources

To monitor the occurrence of incidents, the AP Funds and Council use a large number of sources, including the media, trade association and UN bodies. Nevertheless, there is always the risk that individual incidents will be overlooked. Any information that comes to the attention of the Council about such an incident or violation is incorporated into its systematic process.




1. Review of the Corporate holdings of the AP-Funds

The Council receives systematic business intelligence covering approximately 4,000 companies. Among the sources are media, other investors, trade associations, UN bodies and nongovernmental organisations.

2. In-depth examination

The Council performs a review and overall analysis of companies, industries, problem areas and investor initiatives.

Approximately 100–200 companies every year are reviewed further for suspected implication in violation of international conventions.

3. Choice of companies and dialogue objectives

The Council chooses companies and preventive projects. The choice of focus areas does not represent a statement that some areas are more important than others but is simply a deliberate strategy to devote the resources of the Council to issues that are most likely to benefit from them.

The Council pursues direct dialogue with a number of companies whose violations of international conventions are evident and well documented.

In addition, the Council collaborates with various service providers to dialogue with another hundred companies in response to
alleged violations of international conventions.

4. Dialogue efforts

In-depth corporate analyses and possible comparisons with minimum requirements and best practice for the industry in question.

Additional pressure, such as collaboration with other investors, submitting proposals to general meetings and voting at general meetings.

5a. The objecitve of the dialogue has been achieved

The dialogue has been concluded

The dialogue has been concluded. The company is closely monitored for five years.

5b. The objective of the dialogue has not been achieved

The dialogue continues

Unless a dialogue has produced the desired results after four years, the Council recommends that the AP Funds to divest the company. Each AP Fund makes its own divestment decisions.

The Council checks once a year to see whether the situation has changed and the company is now operating in compliance with
international conventions.