Third Swedish Pension Plan Divests from Nukes and Tobacco Companies

AP2’s decision sees it keeping up with new laws, sister funds AP1 and AP4.

Pension giant AP2 may have arrived late to the Swedish pension fund tobacco and nuclear divestment party, but it’s working hard to catch up and is dumping those assets, too.

The $36.9 billion retirement fund cut 60 tobacco companies and businesses involved in the nuclear weapons industry from its asset mix. A new Swedish law, passed last year, requires the pension funds to invest with sustainability in mind.  

AP2 removed tobacco stocks in hopes of encouraging smokers to quit. Nukes are out, in keeping with the UN’s Non-Proliferation Treaty, which aims for the complete nuclear disarmament.

The Gothenburg-based pension organization is revaluating its portfolio in line with recent legislation and its own sustainability goals, it said Tuesday. These exclusionary decisions are similar to those of sister plans AP1 and AP4, which in January removed stocks not in accordance with environmental, social, and governance (ESG) principles.

The fund’s asset mix as of December 31 was 42% equities, 34% fixed income securities, 11% real estate, 5% private equity, 3% alternative risk premiums, 2% alternative credits, 2% China A-shares, and 1% Chinese government bonds.

Of those assets, 83% are managed internally.

AP2 was unable to be reached for comment.

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