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| Responsible and Sustainable Investment Update | ||||||||
News for Pension Funds and their Advisers on Responsible Investment from the |
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Issue Number 5 – Published Winter 08
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Welcome to the UK Social Investment Forum's quarterly update for pension funds and their advisers. It is produced as part of UKSIF's
NAPF highlights importance of responsible investment The National Association of Pension Funds (NAPF) has released its new Corporate Governance Policy and Voting Guidelines which includes a section on ESG issues. In it, NAPF identifies: “the importance of incorporating ESG considerations into investment decisions." It said that by applying the UN Principles for Responsible Investment (UNPRI), its members could work towards improved long-term financial performance, closer alignment between their own objectives as institutional investors and those of society at large and better management of reputational risk. NAPF also gives its support to the Extractive Industry Transparency Initiative (EITI) and the Carbon Disclosure Project (CDP). Visit http://www.napf.co.uk/.
The self-assessment template in Local Government: Responsible Pension' was developed by Mike Taylor of London Pension Fund Authority, with support from UKSIF, the Local Authority Pension Fund Forum and the Chartered Institute for Public Finance and Accountancy. The assessment, in the same report, finds that only a small number of Local Government Pension Schemes (most notably the Environment Agency PF) demonstrate leadership. Contact anne.desgagniers@uksif.org.
1. Local Authority Pension Fund Forum (LAPFF) signs UN Principles for Responsible Investment The LAPFF has become a signatory of the UN PRI as a professional service provider. LAPFF hopes this will encourage local government pension funds in their RI development. Visit http://www.lapfforum.org/. Environment Agency Pension Fund (EAPF) issues global equity mandate with ESG criteria EAPF has issued a tender for a £50-£150 million actively managed global equities mandate. The tender highlights climate change as a material issue and states that support of UNPRI would be desirable. Visit http://ted.europa.eu/. Unison awards SRI mandate Unison's Staff Pension Scheme has awarded its £140m socially responsible investment equity portfolio mandate to Standard Life Investments. The portfolio will include a socially responsible investment and engagement overlay, consistent with the pension fund's SRI policy, and will be 60% invested in FairPensions publishes pension scheme and fund manager surveys The FairPensions “UK Pension Scheme Transparency Survey on ESG Issues" of the 20 largest pension funds concluded that few of them are making meaningful efforts to be publicly accountable, in spite of significant improvements since last year. Only 20% disclosed voting records and half had no apparent policy covering ESG issues. The “Fund Manager Transparency and Engagement on ESG Issues" survey found that 75% of the top 20 funds managers do not disclose responsible investor policies on ESG issues. Top performers in the survey included F&C, Hermes, Morley and Insight. Visit http://www.fairpensions.org/. 2. INTERNATIONAL PENSIONS Caisse des Dépôts 2006 Corporate Responsibility Report addresses its responsible investor role La Caisse des Dépôts, which has responsibility for the French Reserve Fund (FRR) and the RAFP Pension fund, has published its 2006 corporate responsibility report. The report addresses its responsible investment activities, including its adherence to the UN PRI, the integration of ESG issues in investment activities, the exercise of voting rights and investments in renewable energies. Download the report from: http://www.caissedesdepots.fr/spip.php?article725 PGGM targets ESG in emerging markets and appoints ethical advisers The €86bn healthcare pension scheme has requested that Mercer seeks out emerging market equities which incorporate ESG into their remit. This is the fist emerging market equity mandate. Additionally, PGGM has appointed three prominent experts in the fiels of climate change, human rights and the arms industry as ethical advisers to the scheme. Visit www.pggm.nl Swedish Premium Pension Authority (PPM) appoints State Street for global SRI mandate The mandate excludes companies that violate international conventions PBU questions H&M on grounds of UN Global Compact breach Pædagogernes Pensionskasse, the €4bn Danish pension fund for education practitioners, has called for clarity from fashion retailer Hennes & Mauritz on its child labour policy following a Swedish television report claiming use of child labour by H&M suppliers. This is in conflict with the 10 principles of the UN Global Compact, to which PBU has committed itself. Visit http://www.pbu.dk/. CalSTERS signs up to UN PRI The $176bn California State Teachers' Retirement System, CalSTRS, has signed the United Nations Principles for Responsible Investment, agreeing to incorporate environmental, social and governance issues into investment decision-making. http://www.calsters.com/ Pension Funds address Sudan and Burma investments · The $50bn Massachusetts Pension Reserves Investment Management Board is selling $54m of shares in eight companies including Alstom and PetroChina because of their links to the Sudanese Government. · ATP, the €59bn Danish labour market pension fund, sold its shares in Total and other oil companies working directly with Myanmar Oil. In addition, ATP will adhere to the new sanctions from the EU concerning timber and precious metals from · PGGM is considering its position as a shareholder in companies which are active in Burma. It intends to actively engage with those companies in order to change their behaviour, with the ultimate consequence being withdrawal of investments. Visit http://www.pggm.nl/. Norwegian government pension fund boycotts cluster bombs and excludes British mining company The €250bn fund has extended its boycott of companies involved in the production of cluster bombs and nuclear weapons by banning investments in GenCorp, the 3. COLLABORATIVE INITIATIVES BY PENSION FUNDS Funds join call for climate change legislation in “ Led by the Prince of Wales' Corporate Leaders Group on Climate Change, 150 global business leaders, including asset management firms and pension funds, have published the Bali Communiqué calling for a legally binding UN framework dealing with climate change. A copy of the Communique was delivered to the United Nations secretary general Ban Ki-Moon and the 130 environment ministers attending the UN climate negotiations in 8 of the world's biggest pension funds to act on investment strategies against global warming The 'P8' (8 of the world's biggest pension funds – named in reference to the G8 group) met in November with Al Gore and leading investment and climate change experts to advance investment strategies to combat global warming. The P8 group plans to meet every 6 months to address global warming. Visit http://www.princesofwales.gov.uk/.
UNEP FI and Mercer report finds SRI returns equivalent to those of non-SRI investments 'Demystifying Responsible Investment Performance' examines SRI and financial performance. The report finds that considering ESG factors does not lower returns. Visit www.unepfi.org. RI Metrics launched to rate asset managers on responsible investment Founded in 2007, it provides products and services for pension funds and their advisers which measure the responsible investment compentencies and practices of asset managers on a global basis. Visit www.rimetrics.com. Hymans Robertson publishes survey on asset managers' activity on ESG issues “Environmental, Social and Governance Issues: Survey of Asset Managers Activity 2007" finds that a number of major asset managers rejected being active owners, preferring to go under-weight in stocks where they identify potential ESG risks. Visit http://www.hymans.co.uk/. UKSIF is grateful for financial support from Esmée Fairbairn Foundation for the Sustainable Pensions Project. 
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