AP7 Adds 2 Chinese Firms to Blacklist Over Large-Scale Coal Production

Swedish pension fund AP7 added two companies to its blacklist while removing three as part of its twice-yearly update. The list, which will be updated again in June, now totals 106 companies to be excluded from the pension giant’s investment universe.

The 900 billion Swedish krona ($86 billion) pension fund announced it is excluding China’s Shanghai Electric Power Generation Group and Datang International Power Generation Co. Ltd. because the companies’ large-scale coal operations go against the Paris Agreement and because they have no credible plan to convert to green energy.

The pension fund also announced in a statement that Dallas-based engineering company AECOM Technology Co., Indian electric utilities provider Tata Power Co. Ltd. and Korean explosives manufacturer Hanwha Corp. are no longer blacklisted “due to the fact that there is no verified information about ongoing norm violations from the companies after being excluded for five years.”

AP7 claims it uses its blacklist as “an engagement tool to persuade companies to turn into a more sustainable direction” and equates blacklisting companies with company dialogues and voting at general meetings.

“AP7 invests in the companies that in an acceptable way act according to the requirements of the international conventions that Sweden has signed, and which are expressed in the UN Global Compact’s ten principles, which describe companies’ responsibility for human rights, working conditions, the environment and anti-corruption,” the announcement stated.

According to the pension fund, it also blacklists companies that participate in developing and making nuclear weapons. It added that the development of its climate blacklist is ongoing to keep it in line with the International Energy Agency’s road map for net-zero climate emissions by 2050.

In its climate action plan for 2023, AP7 stated that the climate aspect of its blacklisting is regularly updated to keep in line with research and includes incident-based analysis that has led its blacklist to include companies involved in oil sands production, Arctic fossil fuels extraction, thermal coal mining or coal power, or companies have no credible plan for phasing out these activities.

“According to IEA’s roadmap from 2021, there is no room for the development of new coal in accordance with the Paris Agreement,” stated A7’s plan. “In 2022, we developed the definitions and tightened the criteria relating to coal, oil sands and expansion of fossil fuel extraction.”