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Just 1 in 99 schemes show ESG best practice

UK - Only one UK-based local authority pension funds currently demonstrates best practice towards responsible investment, according to research produced by the UK Social Investment Forum.

Findings of a study conducted by the responsible investment body reveal only the Environment Agency pension fund demonstrates what it considers to be ‘best practice at level 4" of a new initiative to help local government schemes meet their environment and social governance (ESG) targets.

The responsible investment self-assessment template created by the UKSIF is designed to take trustees through key ESG investment issues and subsequently ranks the fund overall as weak (1), fair (2), good (3) and best practice (4) if it meets all of the key criteria, which were formulated through discussions with six key pensions "opinion formers".

More specifically, the template assists trustees through key LTRI and ESG issues by looking at their knowledge and understanding of issues, as well as their regular review and disclosure to stakeholders, along with agreed policies to address the issues, resources, management and procurement processes in place to implement policies and investment and ownership strategies for implementing such policies.

Today's launch, at the London Authority Pension Fund Forum (LAPFF), is part of the wider UKSIF Sustainable Pensions Project which was launched in 2006 to assist UK occupational pension funds adopt more sustainable and responsible investment strategies, but was formulated through work with LAPFF and the Chartered Institute of Public Finance and Accounting (CIPFA).

At the same time as establishing the Environment Agency is operating under best practice, the study on 99 pension funds found only 10% of local government pension funds rank at level 3, as all remaining funds are divided evenly between levels 2 and 1.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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