Towards Sustainable and Responsible Investment

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Towards Sustainable and Responsible Investment
Penny Shepherd MBE Chief Executive UK Social
Investment Forum (UKSIF) 12th May 2006
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Contents

• Pensions and the Longterm
• The Developing Fiduciary Argument
• International Developments
• The Public Policy Context
• Beyond Equities
• UKSIFs Sustainable Pensions Project

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Pensions and the Long-term
For many institutional investors, it is the
long-term that matters and in this context
environmental, social and governance issues take
on new meaning Treasurer, State of Connecticut
- principal fiduciary for 23 billion in pension
assets
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Principles for Responsible Investment

• We will incorporate ESG issues into investment
  analysis and decision making processes.
• We will be active owners and incorporate ESG
  issues into our ownership policies and practices.
• We will seek appropriate disclosure on ESG issues
  by the entities in which we invest.
• We will promote acceptance and implementation of
  the Principles within the investment industry.
• We will work together to enhance our
  effectiveness in implementing the Principles.
• We will each report on our activities and
  progress towards implementing the Principles.

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Ultimately, its about beta!
Concept Forum for the Future
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The fiduciary case is increasingly unavoidable
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International Developments in the Public Sector
Ethical Guidelines Norwegian Government Pension
Fund - Global
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Securing the Future

• Lead by example be recognised as an EU leader
  in sustainable public procurement by 2009
• Key issues include
• Climate Change
• Sustainable Consumption and Production

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An Increasing Range of Approaches
Thematic Approaches
Securitisation
Universal Investors
Engagement
Sustainable Property
Integration
Long-term Responsible Investment
Screening
Infrastructure
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Managers Views on Adoption of SRI Practices
Active Ownership Almost 80 predict it will be a
mainstream practice within 5 years (89 in 10
years) Positive or Negative Screening Almost 40
predict that it will be mainstream within 5 years
(65 in 10 years) Integration of
Social/Environmental Corporate Performance
Indicators 37 predict it will be mainstream
with 5 years (73 in 10 years) Mercers 2005
Fearless Forecast (Survey of 195 Managers)
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UKSIF Sustainable Pensions Project

• Key Objectives
• Highlighting the Challenge of Leadership in
  Public Pension Procurement
• Encouraging the Pension Funds of Private Sector
  CSR Leaders
• Supporting the Advisers
• Developing an Effective Online Knowledge Base

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Thank you for listening E-mail
penny.shepherd_at_uksif.org or
anne.desgagniers_at_uksif.org Website
www.uksif.org