The C$123.8 billion (US$117.7 billion) Canada Pension Plan Investment Board, the $14.9 billion United Methodist Church General Board of Pension and Health Benefits and the £24 billion ($37.6 billion) Universities Superannuation Scheme and 33 other pension funds and investment advisers have called on 86 publicly traded companies to fulfill their pledge to comply with reporting disclosures under the United Nations Global Compact.
The companies — voluntary signatories to the compact that commits them to report annually on their progress in implementing goals on a set of environmental, labor, social and corporate governance principles — risk being kicked out of the sustainability initiative unless they comply by the end of the year, said Gavin Power, deputy director of the compact, introduced in 2000.
The global investors group is spearheading the effort to get the companies to honor their commitments to the compact. In all, about 720 other publicly traded companies around the world are signatories of the compact and have complied with its reporting disclosures, Mr. Power said.
Names of the deficient companies won’t be released until the end of the year, Mr. Power said.
“It’s more effective for them (investors) to work behind the scenes to pressure them (companies),” Mr. Power said.
“Shareholder engagement works best when not in the public eye,” said Elliot Frankal, spokesman for the U.N.-supported Principles for Responsible Investment. “The investors are contacting them (the companies) trying to police it (the compact).”
PGGM Investments, which manages the €87 billion ($119 billion) Pensioenfonds Zorg en Welzijn, Zeist, Netherlands, and the C$74.5 billion BC Investment Management Corp., Victoria, British Columbia, are also among the institutional investors leading the engagement effort.
The investors are part of a group of 680 pension funds and other institutional investors — including California Public Employees’ Retirement System, California State Teachers’ Retirement System, New York City Employees Retirement System, Connecticut Retirement Plans and Trust Funds, Illinois State Universities Retirement System, Illinois State Board of Investment, BP PLC Pension Fund, Caisse de Depot et Placement du Quebec — that are signatories to the voluntary Principles for Responsible Investment, developed in 2005. The principles are designed to encourage long-term sustainable investment returns and markets through better analysis of environmental, social and governance issues in investment process and promote responsible shareholder and corporate practices, according to a statement by the PRI organization.