The Ethical Council of Sweden's First to Fourth AP Funds has reported on 2008's progress in its engagement with companies suspected of violating the ethical guidelines which preside over the four Funds' investments, with success in several cases.

When the Ethical Council identifies a breach of convention, it often indicates that a company has failed to acknowledge responsibility for incidents or to take a proactive approach to environmental and social issues.

Throughout 2008, the Council met with the majority of companies that it is currently in dialogue with around the world and discussed the violations. The companies are reported to have shown a serious interest in the Ethical Council's views, and many have taken the steps necessary to address the problems quickly.

France-based Sodexo has been highlighted as an example of the Council's success in making a difference with news that, following contact with the Ethical Council, Sodexo quickly formed and implemented a human rights policy following an incident at a refugee detention centre in the UK.

Christina Kusoffsky Hillesöy, chairwoman of the Ethical Council, was pleased with the outcomes. "It is satisfying to see that our dialogues with the companies are effective and that the companies can be persuaded to take action. This approach to bringing about changes and improvements requires patience and the establishment of mutual respect and trust, and is a strategy that is well suited to the long-term nature of the four Funds' investments and professional relationships."

The Ethical Council's dialogues with companies are part of a process used to identify breaches against the guidelines for investment; as a result of some, the Council has chosen to cooperate with other investors to increase its leverage and the opportunities to exert an influence. It also said that it supports a number of international initiatives which aim to achieve greater transparency in corporate reporting, and to promote corporate social responsibility.

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