The main tool used by the Third Swedish National Pension Fund (AP3) to influence development is to steer companies towards sustainable value creation through active stewardship and to ensure that its efforts and engagements are focused on the areas deemed to have the greatest impact on its investments. AP3 focuses on corporate governance, climate, human rights and biodiversity. For each area, it publishes an action plan that contains requirements and expectations for the investee companies, including targets.

In investee companies where AP3 has a majority stake, it exerts its influence via board representation. In its holdings in Swedish listed companies, it prefers to carry out active engagement in-house via company dialogue, voting at AGMs and via representation on committees. In foreign listed companies, AP3 often works with other asset owners, mainly through the AP Funds’ Council on Ethics, to maximise its impact. As a last resort, it excludes or divests companies where dialogue has not achieved the desired outcome.

Although AP3 refrains from investing in certain companies, its portfolio may contain companies that face significant sustainability challenges. These companies may be important for societal development and AP3 is therefore doing its utmost to ensure that their transition is both swift and impactful. This is particularly true for companies that face sizeable predicaments in managing climate-related risks and capitalising on opportunities arising from climate change. For its part, AP3 has adopted an escalation process whereby it gradually increases pressure on companies that are failing to perform in line with expectations.

AP3 votes at all portfolio companies' AGMs. During the 2024 AGM season, AP3 voted on more than 16,000 resolutions in +1,100 portfolio companies in 30 countries. It also abstained from voting or voted against the board’s recommendation on 23% of the resolutions in foreign companies.