Responsible Investor

ESG leaders reveal approaches at TBLI conference

UK’s Environment Agency wins award for best investor at inaugural ESG Leaders Awards.

The €33.8bn ($49.5bn) French pensions reserve fund (FRR) is in the process of defining a strategy on climate change that will likely include investments in cleantech funds, FRR executive board member, Antoine de Salins told delegates at the TBLI European conference in Paris last week.
The affirmation was one of a number of accounts at the TBLI conference suggesting expectations are growing for institutions to be responsible on issues such as climate change. The FRR, which is a signatory of the UN Principles on Responsible Investment, already has about €600m invested in SRI mandates with five asset managers, which it has indicated will be an initial allocation to responsible investment.
De Salins said that at a recent meeting of the world’s biggest pension funds and corporations in London there was an active discussion on environmental, social and governance (ESG) issues: The chief executive officers of the corporations present said they now spent at least 10% of their time on ESG issues. I think this demonstrates clearly that times are changing.”
Rob Lake, senior portfolio manager for ESG issues at ABP, the €218bn Dutch pension fund, said one issue that leading pension funds are encountering is a lack of suitable product in areas of sustainability that is

packaged well enough for institutions to invest in. Funds making responsible commitments, he said, were often required to spend more time researching smaller investments. As an example, he said ABP had a €20m investment in microfinance, which took the same due diligence time as for an equity fund of €250m. Asked whether ABP could be interested in partnering with third parties such as non-governmental organisations for such investment projects, Lake said the fund had already done so for investment in an €60m forestry fund run in conjunction with the Church of Sweden that will invest in tree planting projects in Mozambique: “It’s absolutely possible that we will partner up in more initiatives of this type and we would like to see more opportunities coming to us.”
Regarding the issue of whether ESG criteria could improve fund performance, Lake said ABP was starting from simple principles as it begins to screen its entire €218bn portfolio: “We are asking our portfolio managers whether ESG is useful in adding value to the portfolio, then we can work out how we can quantify and incorporate those findings if the correlation is positive.”
The amount of institutional money now invested in SRI prompted Lake to say that it was no longer a niche

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