Industry News: ESG5

Spotlight on Investors: AMF Pensionsförsäkring

AMF Pensionsförsäkring is a life insurance company owned by the Swedish Trade Union Confederation and the Confederation of Swedish Enterprise. It manages the occupational pension for over 4 million individuals. As of March 31st 2019, AMF had USD 67 billion of assets under management.

AMF seeks to fully integrate sustainability issues into their asset management activities, including effectively managing carbon-related risks to ensure alignment with the Paris Agreement, voting their proxies, and engaging with portfolio companies. To be included into AMF's portfolios, companies must comply with the UN Global Compact, the OECD Guidelines and cannot be involved in the manufacture and distribution of controversial weapons or coal exploration. Today, the firm is working towards the implementation of an ESG framework for its properties and alternative investments.

Fossil Fuel Policy

Sustainability Report – 2018

National Employment Savings Trust

The National Employment Savings Trust (NEST) was set up to facilitate automatic enrolment for workers in the UK as part of the government's workplace pension reform in 2008. As of March 31st 2018, NEST managed £ 2.7 billion in behalf of 6.4 million members, making it the largest defined contribution master trust in the UK.

The consideration of ESG risk factors in the investment management process is part of NEST's core beliefs, as it can improve risk adjusted returns, support long-term wealth creation and help managing reputational risks. The responsible investment strategy focuses on addressing climate change, improving banking conduct and culture, understanding workforce and human capital, and promoting audit best practices. To achieve these goals, ESG issues are integrated in risk management and active ownership. Further, NEST engages with regulators and standard setters such as the TCFD, the Workforce Disclosure Initiative, and the Parliamentary Environmental Audit Committee among others. Going forward, NEST is seeking to divest its tobacco holdings from all of its portfolios in the next two years.

Principles for Investing Responsibly

Voting Policy

Responsible Investing Report – 2018

Spotlight on Investors: HESTA

Founded in 1987, HESTA is the Australian industry superannuation fund for health care professionals. The fund has over 850,000 members and had AU$ 46 billion of assets under management as of June 30th, 2018.

Investing responsibly and recognizing that supporting a healthy economy, environment and society is in their members' best interest is one of the fund's core investment beliefs. HESTA's responsible investment framework is guided by the UN PRI requirements and the UN Global Compact principles on Human Rights, Labor, Environment, and Corruption. As a universal investor, the Super Fund regards Climate Change as source of risk and opportunities for the fund's portfolio. To deliver the best risk-adjusted returns, HESTA has developed a Climate Change policy favoring Engagement with portfolio companies and policy makers over divestment and exclusion (except for Thermal Coal and related assets). Going forward, HESTA is seeking to increase its impact by aligning its assets to the UN SDGs. Naturally, as the Superannuation fund for health and community service workers, the fund has chosen to align its portfolio with SDG 3: Good Health and Wellbeing, SDG 5: Gender Equality, and five others.

Active Ownership Policy

Responsible Investment Policy

Climate Change Policy

Spotlight on Investors: Nathan Cummings Foundation

Established in 1949, the Nathan Cummings Foundation is a faith-based institution rooted in the Jewish tradition of social justice with an endowment of US$ 500 million. The organization focuses on finding solutions to the climate crisis and growing inequality by providing grants to organizations in the US, Israel and others, as well as investing its endowment assets.

The Nathan Cummings Foundation has been a longstanding advocate of Responsible Investing. Not only is the organization a founding signatory to the UN PRI, it also provides grants to initiatives seeking to further Responsible Investing and Corporate Social Responsibility such as Ceres, the Interfaith Center on Corporate Responsibility, and As You Sow. The Nathan Cummings Foundation believes that leveraging capital markets to invest and use their influence as shareholders will help further their mission. Consequently, in March 2018, the Foundation committed to align the entirety of their endowment to Mission-Related Investments, a type of Impact Investing.

Changing Corporate Behaviour through Corporate Activism

Public Equity Portfolio Footprint – March 2019

Spotlight on Investors: University of Toronto Asset Management

University of Toronto Asset Management "UTAM" is responsible for managing the Pension, Endowment and short-term financial assets of the University of Toronto. As of December 31st 2018, UTAM had CA$ 10 billion of assets under management.

In the recently published 2018 Responsible Investing Report, UTAM highlighted its progress in the systematic application of ESG factors. For example, to better manage their climate-related risk, the organization disclosed the carbon footprint of their pension and endowment assets. In line with industry best practice, UTAM measured the carbon intensity, the weighted average carbon intensity and the carbon emissions per $million invested of their portfolios. The report also includes UTAM's proxy voting and engagement record – the asset owner engaged with over 500 companies on topics ranging from Climate Change to Labor Relations. Furthermore, UTAM demonstrated its leadership and commitment to Responsible Investing by signing the "Global Investor Statement to Governments on Climate Change "  at COP24 demanding policy-makers to fulfill the goals of the Paris Agreement. 

Responsible Investing Report: A Closer Look - 2018

Spotlight on Investors: Strathclyde Pension Fund

Founded in 1974, Strathclyde Pension Fund has been managed by the Glasgow City Council since 1996. With £20.8 billion of assets under management and over 230,000 members as at March 31st 2018, it is the second largest UK LGPS fund.   

Most of the Fund's investment analysis and decision-making is outsourced to external investment managers. In accordance to the Responsible Investment policy, external managers are expected to consider ESG risks and opportunities and to engage regularly with portfolio companies on ESG issues. Strathclyde also engages collaboratively with peers through initiatives such as FAIRR and ShareAction. Additionally, the fund manages a Direct Investment Portfolio internally with a focus on positive environmental and social impact which invests in Infrastructure, Renewable Energy, and Regional lending to small companies.

Annual Report & Financial Statements: 2017 - 2018

Investing Responsibly

Spotlight on Investors: Brunel Pension Partnership

Brunel Pension Partnership (Brunel) is one of eight national Local Government Pension Scheme Pools bringing together 10 public sector pension funds including the Environment Agency Pension Fund. It manages £30 billion of assets on behalf of nearly 700,000 LGPS members.

Brunel aims to deliver long-term returns and protect its clients' interests. As such, the organization believes responsible investment is central to how it fulfills its fiduciary duty. Its approach seeks to implement ESG into the investment process for all asset classes and into the Manager Selection process. Furthermore, Brunel actively engages portfolio companies through collaborative initiatives such as Climate Action 100+ and the Transition Pathway Initiative. Finally, the Fund has integrated the TCFD recommendations into its governance, strategy and risk management to improve its management of climate-related risk.

Responsible Investment Policy Statement

Addressing Climate Change Position Statement

Spotlight on Investors: Railpen

RPMI Railpen (Railpen) is responsible for managing and investing the Railways Pension Scheme, which includes 350,000 members from over 150 companies operating within the privatized railway industry in the United Kingdom. As at December 31st, 2017, the Scheme had over US$ 35 billion of assets under management.

Railpen integrates sustainability issues into their investment process. As such, the Pension Fund seeks to improve risk-adjusted returns while impacting the world their beneficiaries retire into by considering ESG factors in their directly managed portfolio and their external manager portfolio. Furthermore, the organization excludes companies on grounds of climate and cluster munitions from their Equities and Fixed Income portfolios. Their approach to responsible investing also includes active ownership through proxy voting and collaborative engagements with the 30% Club and the Workforce Disclosure Initiative.

Sustainable Ownership Report 2018

Spotlight on Investors: Victorian Funds Management Corporation

Established in 1994, the Victorian Funds Management Corporation (VFMC) is a Sovereign Wealth Fund responsible for managing the long-term investments of Victorian State Government entities. The fund invests in a diverse range of assets in Australian and international markets, using internal and external investment managers. As of June 30th, 2018, VFMC had over US$ 43 billion of funds under management.

VFMC considers that organizations that effectively manage material ESG issues improve risk adjusted returns. As such, the firm's investment process excludes Tobacco and cluster munitions producers. Additionally, VFMC integrates ESG factors in their internally managed portfolio and their external manager selection process. VFMC is an active owner, as such, the firm votes all of its proxies, and engages directly or collaboratively with portfolio companies on issues such as enhanced disclosure of climate change risk. Finally, the Sovereign Wealth Fund actively seeks opportunities to expand its understanding of material ESG issues by maintaining active membership of ESG-related organizations such as the UN PRI and the Investor Group on Climate Change (IGCC).

Annual Report 2017 - 2018

Spotlight on Investors: Ireland Strategic Investment Fund

Founded in 2014, the Ireland Strategic Investment Fund (ISIF) is a Sovereign Wealth Fund managed by the National Treasury Management Agency. As a long-term investor in Ireland, the fund has a duty to actively contribute to the sustainability of the Irish economy for future generations by providing capital to scale companies. As of December 31st, 2018, the Ireland Strategic Investment Fund had € 8.8 billion of assets under management.

The ISIF believes that organizations that manage ESG factors effectively are more likely to endure and create sustainable value over the long term than those that do not. As such, it integrates these factors throughout the investment decision making including the voting process. As of 2018, following the Fossil Fuel Divestment Act, the ISIF is prohibited from directly investing in any company generating 20% or more of its turnover from the exploration, extraction or refinement of fossil fuel. Additionally, the ISIF screens out companies involved in the manufacture of cluster munitions and anti-personnel mines.

Sustainability and Responsible Investment Strategy

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