A group of 16 U.K. pension funds, representing more than £200 billion ($300.9 billion) of assets, has thrown its weight behind a new guide to responsible investment.
“A Guide to Responsible Investment Reporting in Public Equity” has been published as part of the 16 pension funds' wider efforts to include responsible investment in money manager selection and monitoring processes. Executives at the pension funds believe responsible investment reporting can help to improve transparency and accountability between asset owners and money managers.
The aim is for the guide to be used by all pension funds to help inform their engagement and monitoring activities of current and prospective money managers.
The guide is supported by 16 public and corporate pension funds of varying sizes, including the £40.3 billion BT Pensions Scheme, London.
“We are very conscious that, as the demand side of the investment chain, if we get together and we are clear about what we are looking for, we can send a strong signal down the chain to the investment managers,” said Daniel Ingram, head of responsible investment at BT Pension Scheme Management, and lead editor of the guide, in a telephone interview.
Mr. Ingram said that despite the practical challenges of collaboration among 16 pension funds, it was important because they were not seeing the type of reporting on responsible investment that they required. “The feedback was that the fund managers were being asked for lots of different things: It wasn't clear what we wanted.”
The group was also conscious that a number of smaller pension funds might only just be “dipping their toe into responsible investment — our thinking was, if we can give them some help with this guide, they could kick-start conversations around ESG integration.”
The next stage is to think about developing the collaborative nature of the group and looking beyond public equity, to other asset classes and potentially different markets, Mr. Ingram said.
The guide is also supported by the BBC Pension Trust, Environment Agency Pension Fund, Kingfisher Pension Scheme, Lothian Pension Fund, Merseyside Pension Fund, National Employment Savings Trust, Northern Ireland Local Government Officers' Superannuation Committee, Pension Protection Fund, The Pensions Trust, RPMI Railpen, Strathclyde Pension Fund, The Superannuation Arrangements of the University of London, Unilever Pension Fund, USS Investment Management and West Midlands Pension Fund.
The guide can be downloaded from the website of the National Association of Pension Funds.