Sweden’s AP funds shift Grupo Ferrovial, PetroChina and Thales on international convention breaches

Corporate engagements ongoing with Wal-Mart, Toyota and Freeport-McMoRan

Sweden’s €80bn AP1-4 national buffer pension funds say they have successfully lobbied three major international companies, Spain’s Grupo Ferrovial, PetroChina and France’s Thales to abandon projects which flouted international conventions ratified by the country. The funds’ joint ethical council puts pressure on companies in which they invest by meeting with top management to warn them about associated breaches of international conventions. As a result of its latest corporate lobbying campaign, it said Grupo Ferrovial’s subsidiary, Budimex, had abandoned plans to build a road through a nature reserve in Poland, after the AP funds protested that the project ran contrary to the UN Convention on Biological Diversity. It said the company had subsequently developed its sustainability policy and risk analyses for the assessment of environmental risks connected with infrastructure projects. The Swedish funds’ campaign at Thales, where it joined with another investor, followed accusations that the company had bribed officials in several countries, contrary to the UN Convention Against Corruption. As a result of the investor engagement, the AP ethical council saidThales had centralised its sales organization and developed a robust anti-corruption program including a manual to help its employees handle corruption. The funds said Thales had also taken a leading role in the European defence industry’s joint initiative against corruption and bribery. Regarding PetroChina, the council said it had been successful in pushing the company to strengthen its safety and environmental routines and include environmental and social issues in its sustainability reporting after an accident caused a chemical spill in China’s Songhua River, flouting the Basel Convention on Hazardous Waste.
Christina Kusoffsky Hillesöy, chair of the ethical council, said: “This is enormously satisfying and a source of encouragement for our work in the ethical council, where we can see that our talks with the companies are truly effective.” Companies that are still being pressured by the ethical council include US supermarket giant Wal-Mart over its labour standards, Toyota over anti-union activity in the Philippines and US copper giant Freeport-McMoRan over environmental standards at a mining operation in Indonesia.
Christina Kusoffsky Hillesöy, chair of the AP ethical council will be speaking at Integrating ESG into Portfolios, New York, 25th June – link to programme