France sees SRI rise
Assets in the French SRI market have risen to E4.4 bn, partly boosted by a E550m switch into SRI by BNP Paribas Asset Management.
CDC’s Novethic ‘socially responsible investing centre’ says that total assets under management in the French market totalled E4.4bn at the end of 2003 – compared to E2.5bn a year earlier.
BNP Paribas Asset Management’s decision to switch E550m into socially responsible investments helped expand the market. Other managers prominent in the SRI market place in terms of assets under management include Dexia AM, Crédit Lyonnais, CDC IXIS AM and the Caisses d’ Epargne
The review said that, excluding funds registered in other countries, the total assets under management in funds were E2.8bn, compared with E1.25bn at the end of 2002 and E920m in 2001.
“The increase is nothing short of spectacular, total funds under management rose by a factor of more than 2.2 in one year, and by tenfold in five years,” Novethic says, adding the positive trend is expected to continue in 2004.
Institutional investors have shown more and more interest in SRI and plan to invest more.
There were 108 funds at the end of 2003, a rise of 35% a year.
l The head of the £620m (E897m) Shropshire County Pension Fund in the UK has defended its decision to readmit tobacco investments – a move which has saved E2.9m.
Phil Guy, head of treasury and pensions at Shropshire County Council in central England, said that “after a great deal of soul-searching amongst committee members” the fund recently decided to allow its fund managers to invest in tobacco stocks at their discretion.
The decision process took almost two years, driven by a feeling that the fund’s prime responsibility was to discharge its financial duty.
“We do feel we have a duty to the wider world as long as it doesn’t impact on our fiduciary duty,” Guy told a conference in London organised by Isis Asset Management.
The fund currently has holdings in five tobacco stocks, Guy said, adding that tobacco stocks were seen as defensive in the declining markets of recent years.
He added the move was prompted in part by local media reports suggesting that Shropshire’s council tax, which funds local services, would have to rise to help fund the scheme. Guy said the fund is the largest single enterprise in the rural county.
“Any shortfall in the pension fund falls on the council taxpayer. We felt vulnerable to such a challenge.“We felt we did the right thing at the time and still do,” Guy said. He said that, comparing returns, the decision had saved the scheme around two million pounds.
Meanwhile, a survey of 130 UK pension fund trustees by Just Pensions and the Ashridge business school found that more pension funds said they were building social and environmental issues into their investment practices. The survey found the trend was set to continue in the next few years.