FRANCE – The 18.5 billion-euro Fonds de Réserve des Retraites has provided more details on its socially responsible investing strategy, saying: “We belong to the social protection system.”
Executive board member Antoine de Salins told the Triple Bottom Line Investing conference in Amsterdam how the FRR plans to go about its SRI strategy.
The fund’s status as a buffer fund, with no withdrawals due before 2020, means that the investment managers have a lot of room for long-term investment planning.
Although still a small player compared with ABP and Norway’s Petroleum Fund, de Salins noted that the impact of SRI in France however is growing, based on national regulations and the direct influence of the FRR.
In March the scheme said it would concentrate its SRI approach on large-cap European equities at first, due to a lack of information elsewhere. The mandates represent around 18% of its assets.
“We belong to the social protection system,” de Salins said. “We have to comply to all directives given by parliament, unions and employers.” The SRI issue for the FRR was based on the theory that it should contribute to the community.
SRI will be implemented fully as stated in the fund’s founding papers and it will become very active as a shareholder.
De Salins agreed with remarks at the conference from representatives of ABP and the Petroleum Fund that more research was needed to support SRI. And he said SRI would be a major issue for the FRR to deal with, largely because it will become an instrument of investment decision-making in March 2005.
ABP’s position is a little bit different, according to Genio van der Schaft, managing director of ABP’s Loyalis Financial Services.
He said that in ABP’s view, the scheme’s own financial interest comes first, which does not directly need to contradict issues concerning social aspects or corporate governance. Corporate governance and SRI should be implemented in the necessary financial decision making process.
He added that ABP has a best of class approach in its investment portfolio decision-making, which compares companies to a set benchmark.
And ABP was currently implementing a negative screening system called ‘Torpedo Research’, which is largely set up to exclude companies from the investment portfolio.
Van der Schaft expects that corporate governance and SRI will be combined by ABP to become functional in their investment portfolio.