UKSIF, the sustainable investment and finance association, will this week call on leading companies to assist and encourage their corporate pension funds to support the UK Stewardship Code and implement responsible ownership and investment practices.
UKSIF will also say that these plan sponsors should educate employees, customers and suppliers about the value of responsible investment practices.
The call will be made at Friday's launch of UKSIF's third biennial "Responsible Business: Sustainable Pension" report on the responsible investment approaches of the UK pension funds of corporate responsibility leaders. The launch is hosted by the National Association of Pension Funds.
The 2011 "Responsible Business: Sustainable Pension" report highlights early signs of a step change in how corporate pension funds are responding to the case for responsible ownership and investment. It finds that:
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BT Pension Scheme, Co-operative Group Pension Scheme (PACE), and F&C Asset Management Ltd. Pension Plan each achieved Platinum ranking, giving three funds at this highest ranking, up from only one in the two earlier surveys
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Over one in four participating funds achieved one of the two highest rankings (Platinum and Gold), up from one in eight in 2009 and one in eleven in 2007
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Participation in the survey has increased overall to one in five corporate pension funds surveyed, up from one in eight funds for the 2009 and 2007 surveys
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RI policies are regularly being applied to a broad range of asset classes. Private equity, bonds and property all showed strong growth in the use of responsible investment policies compared with 2009
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Nearly one third of funds use specialist mandates to implement their responsible investment policy. This proportion has doubled since 2009.
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Funds that start on the responsible investment journey tend to deepen their practices over time.
The 2011 report provides increased evidence for this trend which UKSIF first identified in its 2009 report
Nevertheless, UKSIF says that this progress still insufficiently reflects today's strong corporate awareness of the value of sustainable business approaches and the challenge to investors posed by the Kay Review, the Stewardship Code and other initiatives.
Michael Deakin, Chair of the UKSIF Sustainable Pensions Advisory Board, said:
"Our report demonstrates heartening progress in the approach of leading corporate pension funds to responsible investment. I congratulate those funds which have scored highly in our ranking. In addition, the significantly higher response rate this year is a very welcome demonstration of increased transparency by corporate funds."
Penny Shepherd MBE, UKSIF Chief Executive said:
"Today, the Kay Review, the Stewardship Code and other initiatives are shining a spotlight on the role of investors as stewards of the long-term health of companies. But a large number of corporate pension funds are still lagging behind the leading schemes in their approach to responsible ownership and investment. This is why we are calling on Plan Sponsors to assist and encourage their pension funds to deepen their responsible investment focus."
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