The Swedish AP Funds’ Ethics Council recommends excluding cannabis after identifying multiple problem areas across the national pension funds’ investments.

In its annual report for 2018, the council found areas such as Facebook and human rights, pesticides that threaten bees’ survival and the legalisation of cannabis in Canada and the emergence of listed cannabis companies problematic.

The Ethics Council has for over ten years influenced the AP funds' global portfolio companies to improve their work on the environment, human rights and corporate governance through engagement and dialogues.

In a statement, the council noted that the world has rapidly changed with social media and fast-growing companies. It said: “For example, Facebook has challenges in managing privacy issues and human rights. The Ethics Council has initiated a dialogue on this.”

Furthermore, oil companies such as Shell is facing a challenge when adapting to the products they sell, and the company has now adopted a public long-term goal of reducing the carbon footprint, following talks with the council. The goal is that the net emissions from the entire life cycle of sold energy products should be halved by 2050 and reduced by 20 per cent by 2035.

Other areas in focus have been the deforestation in South America and mining dams in Brazil.

AP Funds' Ethics Council secretary general John Howchin said in a statement that the old law's formulation on sustainability, that the "AP funds should take into account the environment and ethics" in their investments, has been both wise and ahead of its time.

“The formulation gave the AP funds guidance and freedom to integrate and continuously develop sustainability in their investment strategies and working methods. It also contributed to the establishment of the Ethics Council. This happened during a period of rapid development and change in how society and the financial markets considered sustainability.”

“Today, twenty years later, virtually all leading managers work with some form of sustainability strategy. With the new law, the AP funds and the Ethics Council will have an even stronger mandate for sustainability, and we will take that on board,” Howchin said.

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