UK Pension fund trustees must dramatically "raise their game" if they are to meet investor concerns about ethical investment, according to the latest Friends of the Earth survey.
The survey of 100 occupational pension funds is to be published a year after the amendment to the Pensions Act, which required trustees of occupational schemes to disclose through their Statement of Investment Principles (SIPS) the extent to which social, environment or ethical considerations are taken into account in investment decisions.
FOE’s survey shows that most funds now include socially responsible investment in their investment strategy. But many still put few or no obligations on fund managers to engage actively with the firms in which they invest to ensure ethical standards. And most still have no means of monitoring whether trustees and fund managers are meeting their stated ethical policies.
The funds with the best record on ethical investment include major investors such as BT pension scheme and the University Superannuation Scheme. However, local authority pension funds including those of the East Riding of Yorkshire, Merseyside and Nottinghamshire dominate the top group.
The worst performers include the Pilkington pension fund, Marks & Spencer pension fund and the Rover Group pension fund, which failed to adopt any ethical investment principles. A number of large funds, predominately corporations, either refused to co-operate with the survey or did not respond - including the Ford Motor Company, Sainsbury, Barclays Bank, Abbey National and Rolls Royce.
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