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Welcome to UKSIF’s quarterly update for pension funds and their advisers. It is produced as part of UKSIF’s Sustainable Pensions Project which assists occupational pension funds to adopt more responsible and sustainable investment strategies.
I. Key Responsible Investment Highlights
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Sustainable Pensions Corporate Pension Fund Survey 2009 launched
See section II. for details.
PADA hold consultation seminar on Responsible Investment (RI) and Personal Accounts
The Personal Accounts Delivery Authority held a day-long consultation in January to help form its view on the role of RI in the new personal accounts system (PAS). This will be set out in its Investment Consultation Document due in the spring. In advance of the seminar, UKSIF produced a Position Paper which makes the case for RI being adopted across PAS, including for the default fund, and for high quality ethical investment options being made available to scheme members. Visit www.padeliveryauthority.gov.uk.
II. The UKSIF Sustainable Pensions Project (SPP)
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Sustainable Pensions Corporate Pension Fund Survey 2009 launched
‘Responsible Business: Sustainable Pension’ is a bi-annual survey of the RI approaches of the pension funds of UK CSR leaders. The survey is designed to help trustees to learn more about best practice in RI by providing information and useful feedback. It has been sent to senior pension managers of companies in the FTSE4Good and Carbon Disclosure Leadership Indexes. Results will be published in late spring. The survey is sponsored by Hermes Fund Managers and KBC Asset Management. Contact adam.ognall@uksif.org.
III. Pension Funds and Responsible Investment
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1. UK Pensions
NAPF updates on Corporate Governance Policy and Voting Guidelines
NAPF has updated its guidelines ahead of the 2009 AGM season. The amendments focus on the role of the Board and Chairman and remuneration. The guidelines are designed to assist trustees when considering voting at AGMs. Visit www.napf.co.uk.
Environment Agency Active Pension Fund wins ESG award
The fund was named best investor in Environmental, Social and Governance (ESG) issues at the Investment and Pensions Europe’s ESG Leader Awards. Visit www.environment-agency.gov.uk.
Northern Irish local government scheme awards UK equities mandate to Jupiter
The Northern Ireland Local Government Officer’s Superannuation Committee has appointed Jupiter to manage a ‘best ideas’ portfolio similar in composition to the Jupiter UK Alpha Fund unit trust. The mandate will be managed with an engagement strategy designed to meet the scheme’s UN PRI commitment. Visit www.jupiteronline.co.uk.
2. International Pensions
Five Danish pensions schemes become UN PRI signatories
The schemes, with combined assets under management of over €30bn, have signed up to the PRI. This follows on from recent legislation requiring large Danish companies to report on their CSR and RI efforts from 2010. Visit www.unpri.org.
World Bank and SEB launches pension fund-backed green bond
Investors in the bond include Swedish buffer funds AP2 and AP3 and Skandia. Proceeds from the bond, which is managed by SEB, will be used to finance projects which reduce carbon emissions in the developing world. Visit www.worldbank.org.
Commission recommends inclusion of RI criteria in Canadian Pension Plan Reports
The Ontario Expert Commission on Pensions has recommended to the Ontario Government that pension plans be required to declare whether they include RI practices in their investments. Visit www.pensionreview.on.ca.
Norwegian government fund divests from two companies
The €250bn Norwegian Government Pension Fund has divested from Barrick Gold Corporation and Textron Inc due to concerns about environmental issues and cluster bomb manufacturing. Visit www.government.no/gpf.
3. Collaborative Initiatives by Pension Funds
Railpen supports campaign for better shareholder rights in Japan
The Japanese Engagement Consortium, created by Governance for Owners and Tokio Marine Asset Management (TMAM), aims to bring together responsible Japanese and international institutional shareholders. Railpen Investments and TMAM are initial consortium members. Visit www.governanceforowners.com.
IIGCC publishes report on climate change and property investment
‘A changing climate for property investment, a trustee’s guide’ explores the contribution of property to climate change and highlights for pension fund trustees the risks to property values and investment performance. Visit www.iigcc.org.
Investors lend support to Private Equity Council (PEC) RI guidelines
A number of pension funds, including USS, CalPERS and CalSTERS have supported the development of RI guidelines for private equity firms by the PEC. PEC is a Washington based centre whose members include some of the largest private equity houses. The RI guidelines cover a range of ESG issues and were developed under the umbrella of the UN PRI. Visit www.privateequitycouncil.org.
Local authority pension funds join Investor Network for Climate Risk (INCR)
The Local Authority Pension Fund Forum (LAPFF) has become a member of the US-based INCR. INCR is a group of institutional investors and financial institutions that promotes better understanding of climate change risks and opportunities for investors. Visit www.lapfforum.org.
MPs and Trade Unions call for introduction of ‘do no harm’ clause in SIPs
A letter co-signed by MPs, trade unions and pension industry leaders has been sent to the Prime Minister urging the government to oblige pension funds to insert a ‘do no harm’ clause into their statement of investment principles (SIPs). This would require funds to ensure their investment decisions do not cause systemic harm to the financial system. The letter also calls for pension funds to sign up to the UN PRI. Visit www.tuc.org.uk/pensions/.
Marathon Club produces investment management guidance for trustees
‘Behavioural Aspects of Investment Management: Lessons from The Credit Crunch’ aims to assist trustees to identify long-term investment considerations highlighted by the recent crisis. Visit www.marathonclub.co.uk.
RSA’s Tomorrow’s Investor report calls for new type of pension fund
The Tomorrow’s Investor Report addresses the costs, charges and transparency of pension plans and argues that fund management costs could be reduced by more long-term investment strategies. The report announces the RSA’s intention to create a business plan for a new type of pension fund. Visit www.thersa.org.
Survey finds investors believe they are responsible for companies’ ESG strategies
"Institutional Investors’ perspective on their responsibility for corporate ESG policies" conducted by Novethic and BNP Paribas, surveyed large French and UK institutional investors. The survey found that 70% of respondents believe that they have a significant responsibility for the ESG policies of the companies they invest in. The survey also found that for French institutional investors social issues are the main priority whereas in the UK corporate governance is the key concern. Visit www.novethic.com.
Please note: UKSIF - the sustainable investment and finance association - launched its new name and logo in January 2009. Visit our new website www.uksif.org.
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