Swedish pension fund AP7 has signalled its intention to put additional focus on boards’ responsibilities for climate change policy during the upcoming voting season.

AP7 votes at over 4,000 general meetings each year and plans to hold company boards more accountable for the firms conducting a credible climate transition.

It stated that it was of the utmost importance that companies that have a large climate impact carry out concrete conversion work and set credible emission reduction targets in the near term to reduce emissions as soon as possible.

Although AP7 is prevented by law from voting in Swedish listed companies, its Swedish holdings make up a small part of its equity portfolio and it can vote in almost 99 per cent of its portfolio companies’ general meetings.

The pension fund already tightened its voting policy for companies in the Climate Action 100+ in 2022.

It is now tightening those requirements further on company boards and mark against companies with a high climate impact that have not taken the necessary steps in the climate transition.

“If the company cannot demonstrate credible improvements before the general meeting, we will vote against the relevant board members, auditors or against the approval of the company's annual report,” it stated.

This includes companies that do not have sufficient preparations and management for a changeover, those that do not manage and report their climate lobbying, firms that do not set credible emissions reduction targets in the medium term, and companies that do not manage a high deforestation risk in the supply chain.

Furthermore, AP7 will support investor collaboration around net-zero accounting practices and will vote against companies that do not sufficiently take climate considerations into account.

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