The environmental and ethical body that coordinates the work with Sweden’s AP funds in these matters must be fundamentally reconsidered, and the man who has led it for the past 12 years leaves as part of the probe.
In an announcement on Friday, AP1, AP2, AP3 and AP4 – the four largest buffer funds behind Sweden’s income pension, part of the state pension – said that they will “jointly carry out a strategic review of the Council on Ethics, as ESG and responsible investment practices are increasingly integrated into AP the funds’ strategies and objectives for asset management ”.
The funds, which together manage almost SEK 1.8 billion (EUR 179 billion), said: “In connection with this, John Howchin, Secretary General of the Council of Ethics since 2009, announces that he is leaving his role.”
Howchin described the review as a natural opportunity for him to go.
“I want to thank the AP funds for the trust I have gained during this time, and it is with pride that I end my mission,” he said.
The four buffer funds said that the council was formed in 2007 as a collaboration between them with the aim of influencing global portfolio companies through dialogue and commitment to improve their work on environmental, human rights and corporate governance issues.
“Since its inception, the Council on Ethics has engaged thousands of listed foreign companies in dialogue,” they said.
“Sustainability and responsible investment methods have become more important and more comprehensive in the strategies and processes of the AP Funds in recent times, including in their legal mandate,” the funds say.
It was against this background that the funds had now jointly decided to review the Council’s mission and strategy, according to the announcement.
The four CEOs of AP1-4-Kristin Magnusson Bernard, Eva Halvarsson, Kerstin Hessius and Niklas Ekvall-said that Howchin had played a central role in taking the council to where it was today, with great commitment and strong leadership.
“We want to thank him for his important contribution and wish him every success in the future,” the leaders said.
They said that the council played an extremely important role in driving positive change in foreign companies where the funds were owners.
“The purposeful work has highlighted dialogues as an effective tool for improved sustainability work and better long-term returns – a work that will continue and be further developed,” say the CEOs.
In a post on LinkedIn, Howchin said that a structure set up 15 years ago for four very similar AP funds needed a redesign to better fit today’s four divergent AP funds, with their own strong sustainability strategies.
“This was always the likely course with four different AP funds developing their approaches and I wholeheartedly support what I believe is a natural development,” he said.
Looking ahead, Howchin said he planned to take some time off after leaving.
He suggested that he spend some time with his friend Ashish Gadnis and the blockchain platform Banqu he founded – which claims that its technology helps lift people out of extreme poverty – or perhaps visit mines and review the ongoing implementation of the Global Industry Standard on Tailings Management.
“A lot of work to do in the real world,” Howchin said in a post on social media.
He said he would go at the end of this year. In its announcement, the Council stated that an Acting Secretary-General responsible for day-to-day operations would be appointed shortly.