Responsible Investor

Responsible pensions in BP pipeline

Sally Bridgeland, CEO of BT pension trustees explains how the oil and gas company is exploring SRI within the scheme.

The £14bn (€20.1bn) pension fund of BP, the global oil and gas giant, is evaluating how it might integrate a responsible investment approach in its day-to-day running under new trustee chief executive officer, Sally Bridgeland, former consultant with Hewitt Associates and respected SRI advocate, who joined the company in June.
BP was given a sharp reminder of the risks of poor corporate behaviour following its recent $373m (€258m) settlement with the US Department of Justice and Commodity Futures Trading Commission for environmental crimes, including $50m relating to a Texas refinery explosion in 2005 that killed 15 people, and price-fixing charges for manipulating the propane market in 2004. Bridgeland says the company is serious about corporate social responsibility and conscious it must now take steps to make a difference. Her words echo BP America chairman and president Bob Malone, who said following the recent settlement: “In the months and years since these violations occurred, we have made real progress in the areas of process safety performance and risk management. However, there is more to do and we are committed to doing it.”

The task of translating CSR into corporate pension fund activities appears unenviable considering the few SRI leaders amongst large companies, but it is axiomatic. Two thirds of UK corporate pension fund trustees responding to a recent survey by the UK Social Investment Forum (UKSIF) said they believed environmental, social and governance issues had a financial effect on their investments. While at Hewitt, Bridgeland was instrumental in setting up the Long Term Pension Fund Mandate Competition in 2003, which encouraged pension funds to adopt a longer perspective when selecting asset managers, rather than hiring and firing based on short-term performance numbers. The idea was that pension funds might invest as company owners rather than stock traders.
Her new project at BP, which follows on from work initiated by her predecessor Reg Hinkley, who was also a founding member of the sustainable pensions board at UKSIF, bears some of the same hallmarks: “When we started doing the Long-Term Mandate Competition there was a sense that SRI was either a marketing tag or something for extremists. We had to change the

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