Responsible investments in the Swedish pension fund system : A case study of institutional investors

Sammanfattning: Institutional investors are increasing their ownership in corporations and therefore their influence on financial markets is expanding. The Swedish public pension funds are one of Sweden’s largest institutional investors, holding capital for pension savers that amount to 1 123 billion Swedish Kronor. Media and non-governmental organizations’ attention on institutional investors’ corporate engagement have put pressure on their work with socially responsible investments. The Swedish public pension funds are no exception. Recent reports reveal that the pension funds are still owners in fossil fuel intensive corporations as well as firms connected with human rights violations. The aim of this study is to identify factors that influence pension funds’ view on socially responsible investments. Particular focus is directed towards the funds’ view on corporations that are highly involved in fossil fuel emissions. The study is presented as a case study in which a comparison of management between two of Sweden´s public pension funds is made in order to define how the attitude towards socially responsible investments affect the choices of instruments of influence that are used in corporate engagement. The findings of the study argue that the two funds use similar instruments of influence in their corporate engagement. However, differences in how the instruments are applied exist and the study reveals that the two funds’ approaches to corporations that are highly involved in fossil fuel emissions are different. Conclusions from the study are that the funds’ work with socially responsible investments is based on the mandate to serve the Swedish citizens and manage their retirement money in a desirable way. The study argues that the funds’ view on socially responsible investments is based on their role as representatives for the majority of individuals in Sweden and that the funds actions, consequently, should reflect the majority opinion of the Swedish society.