The Bonus Pensionskassen opted as early as 1998 to adopt a sustainable socially responsible investment strategy. “We recognised way back then that companies that managed in a so-called ‘sustainable’ manner represented good long-term value and produced more attractive returns,” the scheme says. Since then, Bonus claims it has consistently implemented and continually enhanced its sustainability investment concept, such that more or less 85% of its assets are now invested in this way.
Bonus says it bases its sustainable concept on green guidelines that relate largely to Austria. “This means essentially promoting: health and safety in the workplace; equal opportunities; environmental protection; and use of renewable energies,” it explains. “Our green concept follows the ‘best in class’ principle, which means we exclude companies that are involved in arms production and trade, the nuclear industry, the production and trade of addictive drugs, those that are considered to disregard human rights, the porn industry, and child labour,” it continues.
Bonus is more than satisfied with the results its concept has produced and the reputation it has built for itself as a socially responsible investor. It remains to date the only Austrian pension fund that Ögut, the Austrian Society for Environment and Technology, which looks at the environmental and ‘green’ records of investors and firms in Austria, has certified as fully meeting the criteria towards implementing a sustainable investment strategy. “This is confirmation that our sustainability principles are well structured and appropriately implemented,” Bonus says.
Bonus believes sceptics need only look at the results. In 2004, when it received the Ögut certificate, its sustainable portfolios achieved above average returns compared with other pension funds and it returned 1.54% in the first half of 2006, compared with a market average of 0.66%.
But getting the message out is not so easy. Bonus is a relatively small organisation and says it has had to adopt a very pro-active communication policy as it odes not have the resources to mount large-scale PR campaigns. Nonetheless, Bonus points out that its assets grew by 29% in 2005. “It was easier to appeal to potential new customers as the subject of sustainable investing is increasingly popular among the general public,” Bonus argues.
But implementing an investment strategy of this kind on this scale requires a corporate framework to support it and Bonus says is has spent the past year or so developing a business model that integrates sustainability with social responsibility that it is now attempting to roll out across the entire company, not just the pension scheme. “Part of the management philosophy is open communication between directors, management and staff at all levels. The main aim of the Bonus pension fund in this regard is to create a people-centred, performance-enhancing and health-promoting company culture,” it explains.
To achieve this aim, it has successfully negotiated certain commitments. The company has joined Austria’s Charta BGF, an organisation focusing on promoting health within companies. This means a corporate philosophy that is now based on a ‘healthy company’ culture. So going forward, a company doctor is available to staff free of charge for examinations, consultations and vaccinations. The company now organises workshops for its employees on various issues such as smoking and maintaining a healthy diet. There are sports classes arranged covering yoga, rambling and back exercises. Fresh fruit and mineral water is available to all staff, as well as subsidised lunches. Staff have a choice of four menus, with the company paying for two thirds of the costs involved.
In addition, Bonus has also negotiated flexi-time for all staff and in particular working mothers, so they can effectively combine work with their family time. Then there are other benefits, including company pension scheme, and various group insurance policies.
In a bid to become ‘green’, the company has now also committed to recycling as much as possible and only purchases materials and paper from companies that are known for their own environmentally-friendly practices.
Transparency is paramount, as anyone can claim to have a sustainable policy, but you need to be able to prove it. Bonus prepares a quarterly newsletter, monthly fact sheets, monthly deposit statements, and maintains a website for its customers. There are regular committee meetings and the composition of the board is regularly checked to ensure it remains fully representative of the employees themselves and their union nominees.
The website includes information on the scheme’s sustainability strategy and testing. Bonus claims the ÖGUT certificate is further proof that the company’s communication policy with regard to sustainability is very distinct and that the issues of sustainability and social responsibility have been successfully incorporated into the scheme as a whole.
Highlights and achievements
Drafting and implementing a sustainable and socially responsible investment and corporate strategy requires real commitment. It is hard to begin investing in a certain way and then morally support other investments that do not meet the same stringent criteria.
Bonus’s achievement of switching nigh on 80% of its assets over to its sustainable portfolios, with enhanced performance as a result, is proof that socially responsible and sustainable investing need not remain at the perimeter of a portfolio with only a minimum allocation of assets to it.
But investing this way has made Bonus something of a flag-bearer, not just among its peers, where it remains the only pension fund in Austria to receive official recognition of its efforts, but also for its sponsoring company. Working hand in hand with the management boards, Bonus has produced a company culture for its members that it can be proud of.