Frameworks that guide the Council on Ethics’ work

In its work driving and demanding positive change by global companies – both individual companies and at the industry level – in the area of sustainability, the Council on Ethics is guided by the AP Funds’ common principles. The work is founded on the Public Pension Funds (AP Funds) Act, international conventions and established standards for responsible business conduct – which together act as a compass for the Council on Ethics.

The Public Pension Funds (AP Funds) Act

The AP Funds are governed by the Public Pension Funds (AP Funds) Act, which stipulates how the buffer capital should be managed in an exemplary way through responsible investments and responsible ownership. The Council on Ethics was founded by the AP Funds in 2007 as a collaboration to jointly address issues that affect global listed companies and complex sustainability challenges.

International conventions

The work of the Council on Ethics is based on international conventions and agreements that Sweden has signed and supports, and which address issues such as human rights, environmental protection and controversial weapons. Examples include:

  • The International Covenant on Economic, Social and Cultural Rights (ICESCR)
  • The International Covenant on Civil and Political Rights (ICCPR)
  • The Convention against Corruption (UNCAC)
  • The Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons (UNCCW)
  • International Labour Organization (ILO) core conventions about fundamental rights at work
  • UN Framework Convention on Climate Change (UNFCCC)

Frameworks for responsible business conduct

The Council on Ethics’ expectations on companies are based on a number of frameworks and guidelines for responsible business conduct. One of these is the UN Global Compact, which consists of 10 principles for companies derived from: the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption.

Another important framework is the UN Guiding Principles for Business and Human Rights (UNGPs). This sets out how companies should manage risks of breaches of human rights in their own operations, through business relationships, or via their supply chains. The UNGPs also set out how companies should ensure access to remedy for those negatively impacted.

The OECD has also established Guidelines for Multinational Enterprises, and published guidance for processes and systems that companies can adopt in their work with responsibility and due diligence. The guidelines are recommendations from governments to multinational companies, supported by a network of national contact points which among other things manage complaints against companies.

The Sustainable Development Goals

The Sustainable Development Goals (SDGs), adopted 2015 by the UN 193 member states, provide a globally shared framework to address the world’s most urgent sustainability challenges. Achieving the SDGs requires commitment not only from governments and companies, but also from investors.

As global investors, the AP Funds are able to contribute in various ways to the SDGs via their sustainability work and via their investments. The Council on Ethics endeavours to contribute to the SDGs through both reactive and proactive work. The reactive work is informed by identified violations in the AP Fund portfolios and the associated severity. The Council on Ethics’ proactive work helps bring about positive change by addressing complex sustainability challenges and material systemic risks.