Increasing asset owner participation

Objective 8

Increase representation and participation of asset owners

Asset owners have always been at the heart of the PRI’s mission: being at the top of the investment chain, they play a unique role in driving responsible investment.

ATTRACTING THE WORLD’S LARGEST PENSION FUND

The PRI is delighted to have this year welcomed Japan’s Government Pension Investment Fund (GPIF) as a signatory to the six Principles for Responsible Investment. Japanese Prime Minister Shinzo Abe announced the move in a speech at the UN assembly meeting on 27 September.

“This will surely contribute to the achievement of sustainable development”.

Japanese Prime Minister, Shinzo Abe

GPIF is the world’s largest pension fund with approximately Y137.5 trillion (US$1.14 trillion). It bases its perspective on ESG issues on its Investment Principles.

“By fulfilling our stewardship responsibilities, we shall continue to maximise medium- to long-term equity investment returns for the benefit of pension recipients.”

GPIF Investment Principles

ASSET OWNER PRESENCE

Breakdown of asser owner by region

Asset owner geographic breakdown 2016

ASSET OWNER TYPES

Breakdown of asser owner by type

Non-corporate pension fund 120
Corporate pension fund 57
Insurance company 38
Foundation 24
SWF or govt. control fund 16
Endowment 12
Development finance institution 9
Family office 2
Other 28

26 new asset owners signed the Principles between 1 April 2015 and 31 March 2016, representing an additional US$2 trillion, bringing the total number of asset owner signatories to 304, representing US$16.6 trillion:

GPIF The Dai-ichi Life Insurance Company, Limited MS&AD Insurance Group Holdings, Inc.
Alecta Pensionsforsakring Fukoku Mutual Life Insurance Company Teachers' Retirement System of the City of New York
Challenger Limited Barclays Bank UK Retirement Fund BVK
Ontario Pension Board (OPB) World Bank Group Retirement Benefit Plans Bedrijfspensioenfonds voor de Landbouw
Colleges of Applied Arts & Technology Pension Plan CAAT Geroa Pentsioak EPSV Loreto Mutua, M.P.S.
Sitra Paul Hamlyn Foundation United Church of Canada Pension Plan
Régime de retraite de la Confédération des syndicats nationaux (CSN) Sophia School Corporation LA Retirement Fund
United Nations Foundation African Risk Capacity Insurance Company Limited PeaceNexus Foundation
Humboldt State University Advancement Foundation CCOO, FP

PROMOTING ASSET OWNER ACTION

How asset owners can drive responsible investment: Beliefs, strategy and mandates examines how asset owners can raise their responsible investment game by ensuring that the mandates they give to fund managers include requirements for analysing and reporting environmental, social and governance (ESG) factors.

The report makes a case for the need for asset owners to do much more to support a sustainable financial system, as asset owners implementing responsible investment has a multiplier effect throughout the investment chain.

USE OF PRI REPORTS

Proportion of asset owner Reporting Framework respondents who reported reviewing managers' Transparency Reports or Assessment Reports:

28%

ESG INCORPORATION AND ACTIVE OWNERSHIP

Proportion of asset owner Reporting Framework respondents who reported considering ESG incorporation/active ownership...

...when selecting external managers:

54%

...when monitoring external managers:

51%

...against targets of 52%.


PROVIDING GUIDANCE ON CLIMATE CHANGE

Developing an asset owner climate change strategy offers a step-by-step approach for addressing climate change across three main strategies: engage, invest and avoid. Case studies outline existing examples of asset owner action, including several initiatives that were started by participants during the project.

It builds on the discussion paper Reducing emissions across the portfolio, which laid out the case for asset owner action on climate change, described why a carbon portfolio footprint is a useful tool for asset owners and covered the key factors for asset owners to consider when reducing emissions.

The PRI launched its Asset Owner Climate Change Strategy Project in response to asset owner interest in understanding whether and how to set an emissions reduction goal. A growing number of asset owners want to know how their assets are exposed to climate change risks, and the role that they can play in an orderly transition to a lower carbon economy.

DEDICATING RESOURCES

The PRI has for the first time set up a dedicated work stream to examine specific challenges that asset owners face in responsible investment, and the inaugural Asset Owner Advisory Committee to advise on its work.

The Asset Owner Insight work stream will develop resources addressing portfolio-level ESG considerations including selecting/appointing/monitoring managers, investment policy/strategy and passive investment. The Asset Owner Advisory Committee consists of high-level representatives from asset owner signatories that have demonstrated leadership in implementing the six Principles.

Asset Owner Advisory Committee:

  • Xander den Uyl, Stichting Pensioenfonds ABP (Chair)
  • Chris Ailman, California State Teachers’ Retirement System (CALSTRS)
  • Sharon Alpert, Nathan Cummings Foundation
  • Jagdeep Bachher / Amy Myers Jaffe, University of California
  • Yvonne Bakkum, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO)
  • James Davis, OPSEU Pension Trust
  • Marie Giguère, Caisse de dépôt et placement du Québec
  • Hiromichi Mizuno, GPIF Jay Ralph, Allianz SE Ian Silk, AustralianSuper
  • Daniel Simard, Bâtirente
  • Anders Thorendal, Church of Sweden
  • Mark Walker, Unilever Pension Funds (Univest Company)
  • Faith Ward, Environment Agency Pension Fund