EUROPE - London's Pension Fund Authority (LPFA) has chosen Dutch asset manager Robeco to undertake voting and corporate engagement on its behalf.
In its first foreign contract, Robeco will be looking mainly after about £1bn (€1.1bn) of the LPFA's global equities portfolio, but the engagement service can also include corporate bonds. The contract is for two years.
In its engagement approach, the asset manager typically takes a thematic approach - with the help of sustainability expertise from its Swiss subsidiary SAM - before deciding on an industry approach.
Erik Breen, head of responsible investing at Robeco, said: "We can then link the theme and specific industry with the companies. We take a multiple-company approach, where we cover a theme through our engagement process.
"SAM's sustainability foresight is specifically geared to those items where there is value to be added from a portfolio management point of view, which neatly fits in with Robeco's active management philosophy."
The asset manager currently has €41bn in assets under engagement for eight Dutch clients.
Breen told IPE: "For us, it is a very important mandate because it is our first foreign contract. We have now extended our ambitions beyond the Dutch market - where we already have proven success with our engagement services - to the UK and other markets where we are active."
In its efforts to expand its market share, Robeco will be up against other UK voting and engagement providers such as F&C and Hermes.
The LAPF was positioned at number 51 in IPE's league table of leading UK pension funds, with £3.6bn in invested assets in the summer of 2010.
For Robeco, responsible investing consists of five interrelated components:
engagement and voting; transparency regarding risk, cost and returns of its products; a range of sustainable and responsible products; the integration of ESG factors into its investment analysis and decision-making processes; and the implementation of corporate responsibility principles in its operational management.
Its definition of responsible investing is based on international codes of conduct such as the UN Principles for Responsible Investment.