The UNISON staff pension scheme in the UK has committed all of its equities investment - two-thirds of total assets - to SRI. In September 2003, the fund put £100m (e150m) into an SRI mandate run by Morley Fund Management. At the time, it was the largest sum ever to have been directed into a socially responsible investment fund in the UK.
Paul Coard, pensions manager at UNISON, says that by and large, the fund is satisfied with its SRI portfolio so far.
“We’re getting returns that are not significantly different than if we were not in SRI,” he says. “And the trustees feel better about where their money is invested.”
But he emphasises that the main point is about getting the returns. The pension fund, when it awarded the mandate, targeted the same returns as if it were a mainstream global mandate.
Before the mandate went out to tender, a study was carried out to rebalance the bonds/equities split, he says. The benchmark was then determined, and then the level of performance the pension fund wanted to achieve against that marker.
And then in the tender process, SRI was one of the criteria.
The SRI fund’s objective was to outperform a composite benchmark consisting of mainstream indices by 1.5% annually over rolling three-year periods. “So far we are not too far away from what we asked for,” says Coard.