Swedish pension provider, KPA Pension, has announced that it has divested its entire shareholding in Tesla, following concerns that Tesla's attitude towards employees' union rights could prove problematic under its investment criteria.

KPA Pension confirmed that it had tried to influence the company in various ways, including working with other owners, with proposals submitted to the company's annual general meeting two years in a row.

However, it said that the dialogue and advocacy work has proven "fruitless", with the decision to divest taken as a result of this.

KPA head of asset management and sustainability, Marcus Blomberg, said: "This is not the result we had hoped for.

"Trying to influence our holdings through ownership control is important for KPA Pension, but now we see no possibility of achieving a change and therefore we have divested the entire holding."

KPA Pension's impact investment criteria, which is based on international conventions and the UN Global Compact, are related to climate and environment, human rights and anti-corruption.

KPA clarified that, if a company violates any of the impactful criteria, dialogue is initiated first and then continued advocacy work.

However, it confirmed that divestment may occur if a company continues to fail to meet the investment criteria and if, after trying the various advocacy tools, it cannot see any opportunity for improvement.

If a company violates any of the exclusion criteria (e.g. tobacco, controversial weapons), the shares are divested immediately, with the Folksam Group's Corporate Governance Committee making the final decision on these issues.

The announcement follows one from AkademikerPension, which has also divested from Tesla.

European Pensions has contacted Tesla for comment.

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