UK - Pension funds want the NAPF to adopt a much stronger line on socially responsible investment.
Pension funds said the National Association of Pension Fund’s SRI policy as outlined in its document, ‘Engaging for success’, was “very vague and far too broad and general”.
The document – which was launched last month and outlined how pension funds can go about engaging in SRI – has fallen short of industry expectation.
A source at a top 100 pension scheme said: “The NAPF document is very vague and far too broad in general. What the industry needs is the NAPF to draw up a standard code of practice for all pension funds to adhere to of which maybe the FTSE4Good criteria could be the benchmark.”
The source added: “If a pension fund is not meeting the guidelines it could lobbied to change its strategy.”
FTSE corporate socially responsible coordinator Craig Greaves said he welcomed an initiative from any organisation based on the FTSE4Good model.
He said: “If the NAPF was to draw up a code of practice based on the FTSE4Good criteria it would certainly help the SRI case and add value to the debate.”
The NAPF has conceded that it will look at adopting some of the forthcoming ABI SRI guidelines published in October to beef up its own engagement for success guidelines on SRI.
But the association defended its SRI document and argued it provided general guidance and had been well received by the industry.
NAPF public relations manager Andy Fleming said: “The NAPF has been working hard over recent years to provide practical support both to companies seeking to report on corporate social responsibility and to investment managers following SRI strategies.”
And some pension fund mangers warned that any initiative would need legal clarity.
Coates Viyella group pensions manager Reinet Quinn said: “The engagement for success document is enough in the present climate but in the long term it may not have enough substance. However, many lawyers think engagement is a way out of something worse such as government legislation compelling pension funds to invest ethically.”
By Michael Schiniou
Partner Insight: A fiduciary management approach gives trustees a richness of information you can't get with a standard adviser approach, especially in times of market uncertainty, explain Russell Investments' David Rae and Paul Wharton
The PPI has unveiled a policy paper outlining current considerations and policy debates relevant to DC scheme default strategies. Kim Kaveh explores some of its views.
The £30bn local government pension pool has appointed Quoniam and Robeco to manage an active equity portfolio worth around £400m.