Pension funds anxious for good steering
27 November 2013 London
Image: Shutterstock
An annual survey of pension funds’ engagement with investee companies shows continued growth in the desire from pension funds for good quality stewardship of their investments. However, this does not appear to be mirrored in the pension fund adviser community.
Pension funds responding to the survey were nearly unanimous (96 percent, up from 93 percent in 2012) in their view that institutional investors, including themselves, have stewardship responsibilities that include engaging with companies and voting shares.
The perceived financial value of this is borne out by 82 percent of respondents agreeing that environmental, social and governance (ESG) factors can have a material impact on their fund’s investments in the long-term. Only 6 percent disagreed with this.
There has been a 30 percent increase in pension fund signatories to the Stewardship Code since the beginning of 2013. The vast majority of responding funds had incorporated their stewardship expectations within their Statement of Investment Principles (SIP).
This clear understanding of their stewardship responsibilities is feeding through to their selection of asset managers—71 percent of respondents indicated they take stewardship policies and activities into account when selecting asset managers.
The survey findings also indicated that other areas of the investment community are failing to demonstrate their commitment to the Stewardship Code. Only 25 percent of survey respondents were able to say that their investment consultants had raised the issue of stewardship with them this past year and in only 17 percent of those cases did respondents say that their investment consultants had suggested signing up to the Stewardship Code.
Joanne Segars, NAPF chief executive, said: “The vast majority of respondents to our survey believe good quality stewardship is important in protecting and enhancing the value of their investments. I am encouraged by the indications that the funds are continuing to embrace their responsibilities and drive a market for stewardship – I trust their investment managers will answer this challenge.
“Three years on from the formal introduction of the Stewardship Code, it is time all those who have signed the code support both its spirit and letter. Pension funds should be able to rely upon their key advisers to do so and therefore I urge the consultant community to reflect upon the evidence in our survey, which demonstrates the importance attached to stewardship by pension funds, and respond accordingly. ”
A full copy of the NAPF Engagement Survey 2013 can be found on the NAPF’s website.
Pension funds responding to the survey were nearly unanimous (96 percent, up from 93 percent in 2012) in their view that institutional investors, including themselves, have stewardship responsibilities that include engaging with companies and voting shares.
The perceived financial value of this is borne out by 82 percent of respondents agreeing that environmental, social and governance (ESG) factors can have a material impact on their fund’s investments in the long-term. Only 6 percent disagreed with this.
There has been a 30 percent increase in pension fund signatories to the Stewardship Code since the beginning of 2013. The vast majority of responding funds had incorporated their stewardship expectations within their Statement of Investment Principles (SIP).
This clear understanding of their stewardship responsibilities is feeding through to their selection of asset managers—71 percent of respondents indicated they take stewardship policies and activities into account when selecting asset managers.
The survey findings also indicated that other areas of the investment community are failing to demonstrate their commitment to the Stewardship Code. Only 25 percent of survey respondents were able to say that their investment consultants had raised the issue of stewardship with them this past year and in only 17 percent of those cases did respondents say that their investment consultants had suggested signing up to the Stewardship Code.
Joanne Segars, NAPF chief executive, said: “The vast majority of respondents to our survey believe good quality stewardship is important in protecting and enhancing the value of their investments. I am encouraged by the indications that the funds are continuing to embrace their responsibilities and drive a market for stewardship – I trust their investment managers will answer this challenge.
“Three years on from the formal introduction of the Stewardship Code, it is time all those who have signed the code support both its spirit and letter. Pension funds should be able to rely upon their key advisers to do so and therefore I urge the consultant community to reflect upon the evidence in our survey, which demonstrates the importance attached to stewardship by pension funds, and respond accordingly. ”
A full copy of the NAPF Engagement Survey 2013 can be found on the NAPF’s website.
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