A coalition of UK pension funds is calling on fund managers to improve and increase disclosure of the social impact of their investments.
Many of the pension funds in the coalition are taking an increased interest in socially and environmentally responsible investing.
From IPE Real Estate:
Over a dozen schemes with £200bn (€267bn) in assets – including the BT Pension Scheme (BTPS), Universities Superannuation Scheme and Pension Protection Fund – argued that improved reporting and disclosure on public equity investments would help asset owners better assess how well RI matters were aligned with the fund manager’s strategy.
It identified two main principles – of transparent integration of environmental, social and governance (ESG) factors and of good stewardship – as key, and added that only “explicit” reporting would allow schemes to gain a better understanding of how such issues impacted short and long-term risk and performance.
Daniel Ingram, the guide’s lead author and head of RI at BT Pension Scheme Management, told IPE reporting was the “missing link” to allow asset owners to make the case for ESG-focused investment.
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Leanne Clements, one of the guide’s deputy editors and responsible investment officer at the £10bn West Midlands Pension Fund, said that, in the fund’s view, there was a need for “broad improvements” in reporting across the fund management industry.
“This is what makes that alignment of UK asset owners totalling over £200bn so important – we need to send a signal to the market, not just select individual managers,” she said.
“There has been some positive direction of travel with regards to climate change and other environmental issues in select managers – and also governance issues. However, social issues appear to be less understood.”
The coalition consists of 16 pension funds that collectively manage more than $300 billion in assets.
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