Responsible Investor

requirements in some countries places a greater reliance on voluntary standards and shareholders often feel the brunt of criticism when this goes wrong.
European and United States funds are increasingly focusing their engagement and voting activities on the emerging markets. However, there are a number of challenges in introducing shareholder engagement in Asia. In many cases, the approach to engagement taken in Europe or the United States doesn’t work well here. This can be due to misunderstandings over roles and authorities, a preference for face-to-face meetings rather than correspondence, or a focus purely on the negative aspects of a company in a manner that is perceived by management as offensive, and unnecessarily damages communication. It is important that Asia-Pacific based institutional investors, with local skills and knowledge, become involved in collaborative activity in their markets to make these activities more effective. There are a number of institutional investors in the region who have active responsible investment programmes. For example, the Thai Government Pension Fund applies a Corporate Governance Rating system to its Thai Equity Portfolio and is developing a set of Corporate Social Responsibility guidelines which its investment managers

will need to incorporate into investment decisions. The Japanese and Australian market has been very active at offering responsible investment funds to the retail and personal pensions sector. And the UN PRI is developing an Asia-Pacific working group for local signatories to facilitate engagement and other responsible investment activities.
Creating change through shareholder activity is not quick work, and is at its early stages between most Asian companies and investors. The New Zealand Superannuation Fund is a long-term shareholder with investment horizons beyond 2025. Asia will become an increasingly important region for us and other investors over this time. We have a firm belief that, with commitment and diligence, we can make a positive difference to corporate behaviour and to the Fund’s returns by using our influence well.
Anne-Maree O’Connor is Head of Responsible Investment for the Guardians of New Zealand Superannuation. The Government set up the New Zealand Superannuation Fund in 2003 to help fund future New Zealand Superannuation payments. For more information: www.nzsuperfund.co.nz
This article first appeared in Investment & Pensions Asia.

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