Responsible Investor

come to us sometimes with investment opportunities that they’d like us to put our beneficiaries money into, but they don’t offer sufficiently attractive rates of return and we can’t relax the financial rules in the interests of pursuing purely sustainability driven objectives.
What determines the financial attractiveness of many business models or types of asset is very strongly linked to policy and regulation: if companies faced tougher limits on their carbon dioxide emissions or there were stronger incentives for energy efficiency then a whole panoply of attractive new investment opportunities might open up. In that sense we are very interested in the policy environment and we are starting to have discussions with policy makers about exactly those things.
One thing in the policy arena that we’ve been involved in just recently has been a letter, under the auspices of the institutional investors group on climate change, was a letter to the G8 group of countries ahead of the summit that they held in June, where they were talking about future climate change policy.
We, together with other investors, wanted to make the point that it is very much in our interest to have a clear, predictable, transparent and strong policy framework on climate change, because the value of existing investments that we have made in carbon funds and renewable energy could be adversely affeceted by inappropriate changes to carbon policy, and clearly we don’t want that. Equally, stronger climate change policies could create new attractive investment opportunities that we would like to exploit.
Responsible Investor: Does ABP have a specific engagement programme with companies it invests in?

Rob Lake: We’re starting to do this much more than ABP has done in the past. Some of that is an organic part of the investment analysis, so to understand what a company is doing on environmental and social issues, the best way to find out is to talk to the company. The process of active questioning makes it clear that large investor cares about these things and that creates a certain amount of pressure on a company. Beyond that we are also developing ways to exercise influence more directly. We already actively vote on shareholder resolutions in the US and we are developing discussions with companies closer to home in Europe also.
Responsible Investor: You’ve also been looking at timber investments – does that fit in with your responsible investment approach?
Rob Lake: ABP has now decided to start investing in forestry. The fund manager is starting to look at opportunities. In that context we are looking at how we can develop an approach to certification, so we think about how we ensure there is a level of environmental quality in the forestry investments that ABP makes, so it goes back to the cross-cutting responsible commitment that ABP has made across the board. Forestry is no exception.

Responsible Investor: The fund has been critical in the past of the pharmaceutical industry. Can you explain why?
RL: The work we have done on the pharmaceutical industry has been done through Pharma Futures, which is a dialogue between a couple of large pension funds, including ABP and a group of senior executives form the leading pharmaceutical companies. It’s a civilised

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