Professional Pensions |
18 Aug 2009 | 13:09
By Giovanni Legorano
pension schemes are lagging behind other categories of asset owners in
signing up to the United Nations Principles of Responsible Investment,
a consultant claims.
Wyatt investment consultant Jane Goodland said corporate funds
represent only a small share of the total number of asset owners
signatories to the UN PRI, although the initiative "has done a good
job" in attracting members.
Goodland said: "While public schemes are signatories, corporate
schemes appear less interested. They have other priorities, such as
funding deficits, so addressing ESG issues is not necessarily their top
of their agenda."
She added: "Public pension funds such as the Universities
Superannuation Schemes in the UK - which is a member of UN PRI - get
greater stakeholder and media pressure, while the corporate funds
typically feel less compelled towards responsible investment."
Goodland explained the transition from defined benefit to defined
contribution schemes compounds this issue. She said DC members were
"less engaged" and often less demanding on the scheme's investment
In addition, according to the 2009 UN PRI Progress Report, asset
owners - which include both public and corporate pension funds - are
outnumbered by asset managers as signatories, with often stark
Brazil, Scandinavia, the Netherlands and Australia/New Zealand are
the only ones to have more asset owners signatories than asset managers.
Goodland said these results point clearly to the limited traction of
the PRI initiative in the US - where there are only 31 signatories in
total, which lags smaller countries or geographical areas, such as the
UK and Australia/New Zealand.
She also said pension funds should be clearer about their expectations of asset managers around responsible investment.
"Unless responsible investment forms an explicit part of the
investment management agreement it's unlikely to be automatically
delivered. A lot of schemes simply aren't aware what their managers do
in this respect," she added.