UK - The £20bn Universities Superannuation Scheme is working with the United Nations to produce responsible investment guidelines for pension funds.
USS chairman Sir Graeme Davis claims that only around 40% of schemes have taken socially responsible investment on board, and urged greater involvement.
Davis – speaking at the launch of the United Nations Environment Programme’s Responsible Investment Initiative – claimed the guidelines may eventually be broadened into codes of practice to ensure compliance.
He said that while interest among schemes had increased, it was difficult to gauge whether there was “proper engagement’ or simply box- ticking.
Davis said: “Pension funds have liabilities which last several decades, so it’s inevitable that the serious social and environmental issues which the UN system seeks to address will increasingly become material investment issues as well.”
The UNEP principles – due for completion by September 2005 – are aimed at encouraging investors to meet SRI best practice to protect both the planet and long-term shareholder value.
An alliance of global investors – of which Morley Fund Management is the UK representative – will draw up the guidelines which pension funds and asset managers will be invited to sign.
They will mirror the Equator Principles which are used by some of the world’s largest banks to guide their actions to support sustainable development.
UNEP executive director Klaus Toepfer described the short-termism inherent in markets as a critical challenge when addressing environmental and broader sustainability issues.
“Many investors, at best, view environment and social issues as a mid to long-term concern and therefore of little relevance to the cut and thrust of modern capital markets,” Toepfer said.
“This is why asset owners can play such an important role,” he said.
“While investing in our capital markets asset owners and their advisors are beginning to appreciate the importance of retaining a long-term view that anticipates new opportunities and threats.”
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