UK - It is not the place of pension funds to encourage companies to go beyond the measures required by legislation in the name of corporate social responsibility (CSR), the National Association of Pension Funds (NAPF) has warned.
According to the NAPF, CSR addresses the wider responsibilities that companies have to society at large and to various stakeholder groups, and is separate from corporate governance.
Laying out its emerging policy on socially responsible investment (SRI) and CSR, the NAPF said trustees of pension funds should understand how their investment managers do research in all areas including CSR, especially in the analysis of long-term risks and opportunities for companies.
However the association does not believe the “broader CSR agenda” called for by some lobby groups, suggesting pension funds should encourage companies to go behind that required by legislation or for their long term financial success, is appropriate.
“Our main concern is – and must remain – the performance of pension fund investments, so as many people as possible can continue to benefit from well-managed, well-funded pension schemes when they retire,” said Christine Farnish, chief executive of the NAPF.
“Caring is something which I do as a private individual. Pension funds on the other hand have clear legal duties to discharge on behalf of their members. Political preferences, sentiment and a desire to change the world do not sit easily with those duties. But a long term view of investment in successful and law abiding businesses does.”
The NAPF said company boards should develop their own CSR policy and disclose it to investors.
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