So what can you do as a responsible investor to ensure that your pension fund or other investments are not supporting companies that exploit their employees, pollute the environment or pay their executives excessive amounts?
At this stage, given the focus on institutional investors, the most important thing is to ask questions of your pension fund, broker or asset manager. These include:
- Write or email your pension fund or investment manager to understand where your money is invested and how it is managed. If you know that you are invested in a company that is engaged in unsustainable business practices, ask questions about what your investment manager is doing to address these.
- Ask about alternative funds available in your pension fund – some pension funds are run on a member choice basis and it is possible that SRI funds are available within the portfolio of options. Investigate the availability of these options. If none are available, ask if there is a plan to make these available.
One of the barriers that asset managers have identified to the growth of SRI in the region is the lack of mandates from asset owners and the lack of demand from end investors, which are the pension fund members and retail investors. One survey suggested that pension fund members were disengaged from their assets, leaving trustees to be solely responsible for members’ interests. If more individuals can engage their pension fund trustees on the availability of sustainable options within the fund, trustees will hopefully feel more comfortable with setting the mandates that will encourage change.
- Look past the marketing and ask questions about the holdings [most funds will provide at least the Top 10 Holdings in their fact sheets] in specific funds that interest you. Do these match up with your views of the types of companies you want to be invested in? If the answer is no, what alternatives are available?
- Ask whether the asset manager:
- has a sustainable investing policy
- discloses proxy voting results – are these for each resolution or just summaries? Are explanations given?
- Discloses its engagement with various investee companies – what were the aims of the engagement, what results were shown and what are the next steps?
- If you hold shares in specific companies, vote on shareholder resolutions and attend AGMS and ask questions.