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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 |
Personal Accounts Delivery Authority (PADA) to begin investment consultation with RI seminar early in 2009
PADA will be holding a seminar to gain a better understanding of what the investment industry and others consider when looking at RI in relation to the design of the Personal Accounts Scheme (PAS). In announcing the consultation, PADA CEO Tim Jones commented that ‘the single most important debates will be responsible investing across the whole of the investment area, and the structure of the default fund’. Visit www.padeliveryauthority.gov.uk.
Government clarifies fiduciary duties in relation to RI
During a debate on the Pension Bill in the House of Lords government minister Lord McKenzie confirmed that ‘there is no reason in law why trustees cannot consider social and moral criteria in addition to their usual criteria of financial returns, security and diversification’. Visit www.publications.parliament.uk.
II. The UKSIF Sustainable Pensions Project (SPP) |
Sustainable Pensions discussion paper on alternative asset classes published
‘Sustainable Alternatives: sustainable investment opportunities for pension funds in alternative asset classes’ examines the growth in sustainable investment opportunities available in a range of asset classes. Visit www.uksif.org/sustainablepensions.
UKSIF to conduct second corporate pension fund survey in 2009
UKSIF’s second corporate pension fund survey will be sent out in January 2009. The survey will question the pension fund managers of UK corporate responsibility leaders regarding their responsible investment practices. Contact adam.ognall@uksif.org.
Sustainable Pensions Library updated
Updates have been made to the Library which provides a collection of key documents and initiatives on responsible investment for pension funds. Visit www.uksif.org/splibrary.
III. Pension Funds and Responsible Investment |
1. UK Pensions
UK asset owner signatories to the UN Principles of Responsible Investment (PRI) reaches 14
There are currently 147 asset owners signed up to the UNPRI, 14 of them based in the UK. A recent addition was the Kent County Council, which operates the £2.6 billion Kent Pension Fund. Visit www.unpri.org.
2. International Pensions
ING adds SRI option to New Zealand ‘KiwiSaver’ pensions scheme
ING, the largest KiwiSaver pensions provider, has added the Sustainable Growth Fund to its offering. ING is now the 7th KiwiSaver service provider to offer an SRI option. Visit www.ingnz.com.
PNO Media and Hermes Equity Ownership Services (EOS) launch RI website
The €2.8 billion Dutch pension fund has launched a site dedicated to the fund’s responsible investments as part of a series of SRI improvements which began last year. Hermes EOS is the fund’s external SRI adviser. Visit www.pnomediaverantwoordbeleggen.nl.
World Bank launches pension fund-backed green bond
Key investors in the bond include Swedish buffer funds AP2 and AP3 and Skandia. The World Bank will use proceeds from the bond to finance projects which reduce carbon emissions in the developing world. Visit www.worldbank.org.
Irish government proposes bill which will ban investment in cluster bombs
The bill will specifically change the investment policy of the National Pension Reserve Fund (NPRF). Visit www.oireachtas.ie.
3. Collaborative Initiatives by Pension Funds
World Investors representing $6.4 trillion in assets call for a ‘strong and binding’ Global Climate Deal
IIGCC, the Investor Network on Climate Risk and the Investor Group on Climate Change coordinated a statement which has been sent to Heads of State and climate negotiators calling for a robust framework to succeed the Kyoto Protocol. The statement calls for clear, long-term policy signals which will allow investors to allocate capital towards funding a low-carbon company. Visit www.iigcc.org.
USS and Environment Agency Pension Fund lead initiative to encourage asset managers to sign the UN PRI
Their initiative hopes to promote the incorporation of ESG issues into investment analysis and decision making. Visit www.unpri.org.
Investment Governance Group to oversee the update and development of Myners Principles
The Investment Governance Group (IGG), a joint industry-government group is being set up by the UK government to update the Myners Principles. Visit www.thepensionsregulator.gov.uk/igg.
FairPensions 2008 fund managers’ survey shows rise in engagement activities
‘Investor Responsibility? UK Fund Managers’ Performance and Accountability on ‘Extra-Financial’ Risks’ surveyed 30 of the UK’s largest fund managers. The report found a 23% increase in average performance of those asset managers who had participated in the 2007 survey. The report ranked F&C Asset Management, Hermes Fund Managers, Insight Investment, Aviva Investors and Standard Life Investments as the top 5. Visit www.fairpensions.org.uk.
RSA’s Tomorrow’s Investor report calls for consumers to reengage with their pensions
The Interim Report argues that any long term solution to the current financial crisis must aim to ensure citizens, along with financial institutions, are able to take more responsibility for the management of investments. Visit www.thersa.org.
NAPF publishes 2008 survey on pension fund engagement
‘Pension Funds’ Engagement with Companies 2008’ found that two-thirds of the UK’s largest pension funds say they are influenced by CSR issues when selecting investment managers. 72% of the funds have their own RI policy in place. Visit www.napf.co.uk.
NSFM responds to OECD pension fund consultation
The Network for Sustainable Financial Markets (NSFM) has recommended to the OECD consultation on pension fund governance that the pay of investment managers and consultant reflect long-term pension objectives. Visit www.sustainablefinancialmarkets.net.
UN PRI and Enhanced Analytics Initiative (EAI) announce merger
The merger is driven by a desire to support better global investment research. Visit www.unpri.org.
Mercer and Trucost develop green metric for pension funds
The new green metric will integrate carbon footprint analysis into portfolio performance reports in order to allow pension funds to better understand the carbon exposure of their investments. Visit www.mercer.com.
UKSIF is grateful for financial support from Esmee Fairbairn Foundation for the Sustainable Pensions Project.
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