GLOBAL - Two leading socially responsible investment fund managers are spearheading a campaign into the risks and opportunities for multinational corporations with operations in China.
Morley Fund Management and Insight Investment are hosting three seminars – the first of which was held on January 22 – to be attended by the Unison Staff Pension Scheme with the Local Authority Pension Fund Forum and Pension Investment Research Consultants also playing an “active role”.
PIRC said it would use the seminars to assess the need for future engagement with companies.
Both Morley and Insight’s pension fund clients have promised to offer feedback from the sessions.
Today’s seminar will offer an introduction to China as an operating environment and the opening of dialogue between companies, investors and specialists.
It is aimed at corporations, such as Marks & Spencer, Boots, GlaxoSmithKline, retail and business services group GUS and Debenhams.
Follow-up seminars – in March and May – will include dialogue between investors and companies on legal, regulatory and labour issues.
Morley SRI analyst Melissa Gamble said China was an increasingly popular base for multinational companies but poor human rights and independent trade unions made it a “risky operating environment”.
She said: “If companies investing in China do not have the appropriate risk management systems in place they may be involved in projects or alliances that give rise to human rights violations.
“This in turn may have a negative impact on investment through significant costs resulting from damage to corporate reputation, critical shareholder and stakeholder action and increased insurance premiums.”
Gamble added that companies which managed business risks effectively were considered better placed to secure superior financial returns and offered attractive investment opportunities.
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