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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 Sustainable Pensions Project which assists occupational pension funds to adopt more responsible and sustainable investment strategies.
I. Key Responsible Investment Highlights |
Personal Accounts System (PAS) to consult on responsible investment
The personal accounts delivery authority (PADA) has confirmed that it will address responsible investment (RI) as part of its overall investment consultation this winter. Pensions Minister Mike O’Brien QC MP, speaking at the National Ethical Investment Week parliamentary reception highlighted the importance of responsible investment for PAS. Contact adam.ognall@uksif.org.
II. The UKSIF Sustainable Pensions Project (SPP) |
UKSIF meets with PADA and responds to Charging Structure Consultation
UKSIF met with PADA representatives to discuss the important of RI for the Personal Accounts System, including a RI strategy for the default fund as well as additional investment options for members which are screened using SEE criteria. UKSIF also responded to PADA’s charging structure consultation, outlining the costs of benefits of adopting a RI approach. Contact adam.ognall@uksif.org.
UKSIF to conduct second corporate pensions fund survey in 2009
The survey of the pension funds of UK corporate responsibility leaders on their approach to responsible investment will be sent out in January 2009. Contact adam.ognall@uksif.org.
UKSIF to publish paper on sustainable investment opportunities in alternative asset classes
The discussion paper, to be published in October, highlights the breadth of sustainable investment opportunities for pension funds across a range of asset classes. To register to receive the report contact sustainablepensions@uksif.org.
III. Pension Funds and Responsible Investment |
1. UK Pensions
Environment Agency Pension Fund awards three RI mandates
RCM, Generation Investment Management and Impax Asset Management, have been appointed to manage £185 million of global equities. The new mandates are part of the £1.5 billion pension fund’s strategic review and drive to ensure its assets are managed in line with the United Nations Principles for Responsible Investment (UN PRI). Visit www.environment-agency.gov.uk/pensions.
Pension Protection Fund (PPF) appoints F&C to provide voting and engagement
F&C will also be providing the fund with advice on its RI strategy. PPF has also made its UK voting records public on its website which marks its first step towards regular reporting in this area. Visit www.pensionprotectionfund.org.uk.
Lothian Pension Fund appoints Hermes EOS to provide a voting and engagement overlay
The £3 billion Scottish pension fund has appointed Hermes Equity Ownership Services following a review of how the fund incorporates ESG issues into investments. Visit www.hermes.co.uk.
USS and other investors acquire stake in Climate Change Capital Group (CCC)
Alliance Trust, USS, SNS REAAL N.V and Mitsui & Co. now own over 50% of the business after investing £56 million in CCC . They have also pledged a further £20 million towards a new fund of funds. Visit www.climatechangecapital.com.
Liverpool Council employees urge pension fund to conduct ethical investment policy ballot
Employees have voted unanimously to call on the Merseyside Pension Fund to ballot members on introducing an ethical investment policy. The fund is currently a signatory of the UN PRI. Visit www.merseysidepensionfund.co.uk.
2. International Pensions
French national pension reserve fund (FRR) extends its RI strategy to all asset classes
The €34.5 billion fund is set to extend its current RI strategy to cover all of its investment portfolios. The fund has also set up a RI committee to ensure the strategy is implemented effectively. Visit www.fondsdereserve.fr.
Dutch Printing Fund awards €60 million SRI mandate to Threadneedle
PGB, the Dutch printing industry pension fund has awarded a mandate to Threadneedle Asset Management for its Absolute Return Global Environmental Intensity fund. The main SRI themes of the fund include environmental risk, sustainability and eco-management. Visit www.threadneedle.com.
APG Investments reviews companies’ adherence to UN Global Compact
APG, fund manager of the Dutch ABP pension fund, is reviewing the 4,500 listed companies in its equity portfolio to test their performance on standards laid out in the Global Compact. Visit www.apg.nl.
Dutch pastors and preachers’ pension fund and SNS Asset Management launch SRI index
The SNS Responsible Index Fund Equity Europe will apply general ESG screens and exclude companies which produce land mines, cluster munitions, atomic, biological and/or chemical weapons. Visit www.snsam.nl.
CalPERS tightens its environmental guidelines and disclosure requirements
The $240 billion pension fund has referenced Ceres’ 14-point Corporate Governance Checklist to ensure that companies provide adequate disclosure on climate risks such as carbon emissions. Visit www.calpers.ca.gov.
European Parliament pension fund sells stake in PetroChina/NCP
The fund has reacted to campaigner and MEP pressure by divesting from the company due to its relations with the Sudanese Government. Visit www.europarl.org.
Danish Government to publish RI and CSR strategy
The government of Denmark is to publish a plan entitled ‘The road to responsible growth’ which will outline procedures to encourage pension plans and companies to incorporate ethical considerations into their investment strategies. New legislation is planned which will make CSR reporting mandatory. Visit www.oem.dk.
AP7 divests from 10 companies in line with its ESG framework
The Swedish Pension buffer fund is selling its stake in 10 companies involved in the production of cluster bombs and nuclear weapons. Visit www.ap7.se.
Norwegian government issues public consultation on pension fund’s SRI approach and withdraws €604 million investment in Rio Tinto
The consultation paper evaluates the current policies of the Government Pension Fund, Global and proposes possible changes to strengthen the fund’s responsible ownership approach. The pension fund’s decision to divest from Rio Tinto is based on concerns regarding its involvement in a joint mining operation in Indonesia. Visit www.regjeringen.no/en.
3. Collaborative Initiatives by Pension Funds
UN Principles for Responsible Investment (UN PRI) achieves over 400 signatories
UN PRI now has over 400 global investment institution signatories representing over $15 trillion of assets under management. Visit www.unpri.org.
IIGCC Signatories publish first annual report on their progress
‘Investor Statement on Climate Change Report 2007’ describes the progress signatories have made in relation to the goals set out in the Institutional Investor Group on Climate Change’s (IGCC) Investor Statement. Visit www.iigcc.org
Investor coalition urges US government to strengthen climate change policies
Fifty-two pension funds, asset managers and investment foundations, led by CalPERS have called for a reduction in emissions by 60 to 90% below 1990 levels before 2050. Visit www.calpers.ca.gov.
Watson Wyatt is publishing report on sustainable real estate
The paper examines how the drive towards a sustainable low-carbon economy presents both risks and opportunities for the commercial real estate sector. It encourages pension funds to assess the sustainability performance of their portfolios in order to identify risks to future returns. Visit www.watsonwyatt.com.
RImetrics launches peer benchmark to compare the ESG performance of fund managers
The Responsible Investment Benchmark (RIB) measures average industry performance across 5 themes; strategy, engagement, integration, voting and transparency and accountability. Visit www.rimetrics.com.
Mercer appointed by the IFC to rate emerging market fund managers
The International Finance Corporation (IFC) has appointed Mercer to conduct the study which will rate fund managers in emerging markets based on their consideration of ESG factors. Visit www.mercer.com.
ASSET4 study analyses ten large European pension funds
ASSET4 and the German Federal Environment Ministry sponsored the study which highlights how pension funds can contribute to more long-term and sustainable investments. The study revealed that pension funds are calling for legal certainty over the links between sustainable development and their fiduciary duty. Visit www.asset4.com.
Study shows responsible investors plan to incorporate ESG into 75% of assets
‘RI Landscape 2008: Asset Owners’ conducted by RI and IPE magazines, analysed 73 European and North American pension funds and found that they currently invest at least €810 billion under RI terms. The funds expect to extend this to include at least 75% of their assets by 2010. Visit www.responsible-investor.com.
RSA launches Tomorrow’s Investor project
Tomorrow’s Investor has been launched by the RSA to raise awareness of citizens of their role as investors and to encourage greater transparency and engagement. Visit www.thersa.org.
CAFOD and FairPensions encourage the public to examine their pension funds over mining
CAFOD, the Catholic aid agency, and FairPensions are urging people to question their pension funds over mining company holdings. The two charities believe pension funds can influence the mining sector to improve its human rights and environmental practices. Visit www.fairpensions.org.uk.
Ben Watson of FairPensions wins Social Justice Campaign Award
Campaigns Assistant Ben Watson was presented the award by Gordon Brown. Visit www.fairpensions.org.uk.
**Please note: RSA Chief Executive to deliver UKSIF Annual Lecture on responsible ownership
Matthew Taylor will be discussing the RSA’s Tomorrows Investor project and will set out a challenge for how pension funds remain accountable to their stakeholders. The Lecture takes place in the evening of November 5. For details contact info@uksif.org.
UKSIF is grateful for financial support from Esmee Fairbairn Foundation for the Sustainable Pensions Project.
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