Tuesday, January 20, 2009

Responsible Trade Union Trustees needed to Save the World (II)

I was hoping to be the first to post on this TUC press release but as usual Tom P beat me to it. Check out his post here on the call that: -

1. Pension funds should insert a “do no harm” clause into their statement of investment principles (SIP), requiring fund managers and other advisers to satisfy trustees that their investment decisions are not causing systemic harm to the stability of the financial system and therefore to the long term interests of their beneficiaries.

2. Institutional investors, particularly the large pension funds, should sign up to the United Nations Principles of Responsible Investment (PRI) as soon as possible. The PRI sets out a series of broad commitments for the engagement of investors with firms around corporate governance, environmental and social performance; it now has over 400 signatories, representing US$15 trillion in assets.

3. A collective reporting and monitoring body should be established to ensure institutional investors are acting on commitment 1. One way to do this would be to broaden the remit of the Investment Governance Group set up as a result of the recent review of the Myners Principles.

This has the support of some serious heavy duty folk. My view has always been that investment governance failures has contributed to the present day economic crisis.

Now we have “TUC General Secretary Brendan Barber, Chair of the Treasury Select Committee John McFall MP, Chair of the Work and Pensions Select Committee Terry Rooney MP, Chief Executive of the Work Foundation Will Hutton, founder of Hermes Stewardship Services and author of The New Capitalists David Pitt-Watson, FairPensions Executive Director Catherine Howarth, Ethical Investment Research Service (EIRIS) Executive Director Peter Webster, Pensions Investment Research Consultants (PIRC) Managing Director Alan MacDougall, HERMES Equity Ownership Services Chief Executive Officer Colin Melvin, RSA Chief Executive Matthew Taylor and Head of Responsible Investment at CIS Asset Management Ian Jones” .

Who all agree for action and are calling for the the economy to rebuilt on these principles and to prevent any repetition of this disaster.

Picture above is of some of my fellow UNISON Capital Stewardship pension reps who are all ready to do their bit and are waiting for the call.

3 comments:

Ron Robins said...

These are good principles being espoused.

It is also up to corporations to deliver timely and comprehensive corporate social responsibility reports too! See my editorial on this at: http://investingforthesoul.com/Editorials/mandatory-corporate-social-responsibility-reporting.htm

Best wishes, Ron Robins

Anonymous said...

Thanks for this - it makes good sense. But how about a "do no harm" clause that extends beyond the direct stakeholders? "commit no human rights abuse" and "protect our environment" would sum a lot up...Ron's reminder of the importance of accountable and transparent reporting is a step on the way... cheers Shane

John Gray said...

Hi Ron
Yes agreed – good report. Companies need to “come clean” If we have full and accurate reporting then we can make sure as trustees they are living up to their promises.

Hi Shane
Agreed. Human rights abuse and damaging the environment is an investment risk. You cannot have responsible investment (2) without making sure that everyone in the supply chain is also treated decently. Good luck the blogging!