Checklist: how ethical is my pension fund?
Look for the answers to these questions in the information you receive from your pension fund, including its annual report, Statement of Investment Principles and correspondence with members. We use the same basic criteria as those set out below to draw up our annual rankings of pension funds and fund managers. Click here to see this checklist being used in practice.
1. Is there a specific section on responsible investment (RI) in the annual report or a dedicated section on the pension fund's website?
2. Does the Statement of Investment Principles outline a strong commitment to Responsible Investment or to taking into account social, environmental or ethical issues?
3. Does the policy go into detail about mechanisms to ensure Responsible Investment objectives are met? E.g. is there information on a policy of engaging with companies the fund invests in or are staff employed to research, engage, monitor and report on Responsible Investment ?
4. Are different approaches to engagement or shareholder activism mentioned? E.g. voting at AGMs, or collaborating with other pensions through groups like the Investors Group on Climate Change.
5. Does the fund actively discuss your ethical concerns with you e.g. through a website, surveys or other forums?
6. Does the fund disclose its top 100 company investments?
"Yes", "no" or "not sure"?
If the answer to the first four questions is "no" or "not sure" then your pension may have little of no commitment to ethical investment. They may claim otherwise in their correspondence, but if they do not disclose their policy in some detail, or their list of shareholdings, then that in itself represents poor practice. Best practice on ethical investment means your pension fund would score "yes" on most or all of the above.
Please feel free to contact FairPensions for advice. Click here to email us