Swedish Pension Fund Divesting from Nukes, Oil Sands Companies

ESG-oriented decision motivated by new law.

Swedish pension provider AP4 is eliminating nuclear weapons and oil sands from its $40 billion portfolio following new legislation that took effect January 1.

“AP4 believes that the modernizations and upgrades of existing nuclear weapons systems that are now taking place are not in accordance with the spirit of the Non-Proliferation Treaty for Nuclear Weapons, which aims to abolish nuclear weapons in the long term,” the firm said in a release.

The organization’s decision to remove the oil sands stocks is aligned with the Paris Agreement’s aspirations for a lowcarbon environment.

“Oil sand is a fossil energy source with high carbon dioxide emissions per energy unit and AP4 believes that this must be phased out in a global transition to a low-fossil society, in line with the UN Climate Convention and the Paris Agreement,” the fund said, adding that this move is a continuation of its climate reduction strategy. “Since then, AP4 has chosen to remove companies with the relatively largest emissions of greenhouse gases and fossil reserves through its lowcarbon investments.” 

AP4 also does not own any coal companies.

The laws allow Sweden’s four AP pension funds to make more illiquid and alternative investments than before.

In 2018, AP4 sold 45 nuclear weapons businesses and five oil sand companies, worth $332 million, according to IPE.com. Profits were reinvested into the global equity portfolio.

“We welcome the fact that sustainability is now introduced in the legislative text with the clarification that the administration should be exemplified through responsible investments and responsible ownership,” said Niklas Ekvall, AP4’s CEO. “In connection with the implementation of the new rules for sustainable management, we choose to further increase our ambitions and opt out of investments related to nuclear weapons and oil sands.”

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