Responsible Investor

reputational risk. The support came in the NAPF’s new guidelines for corporate governance, which highlighted contentious corporate governance issues including the length of time companies retain non-executive directors, executive remuneration, auditor liability and environmental and social concerns.
UK public pension funds are being encouraged to engage with companies over merger and acquisition activity by a new trustee guide by the Local Authority Pension Fund Forum (LAPFF). The guide, titled Which Deals Create Value? – Mergers and Acquisitions through the Lens lists 12 questions for trustees to raise to see if a proposed deal raises any concerns. They include asking about acquirer’s track record on deals to date, the size of the target compared to the acquirer, the financing of the deal and remuneration arrangements for directors. Darrell Pulk, chair of the LAPFF, said: “By issuing this trustee guide the Forum aims to at last kick off some real pension fund engagement on M&A, with the objective of ensuring that the deals carried out in the name of shareholder value really do work in the interests of long-term share-owners.” The LAPFF is a voluntary association of 44 public sector pension funds with combined assets of over £85bn.
Watson Wyatt has strengthened its presence in responsible investment by hiring Paul Richards, a former managing director at Goldman Sachs Asset Management. The consultant said Richard’s appointment as a senior investment consultant based in London was part of a global research initiative into sustainability in institutional investment which incorporates the impact on long-term investment of environmental,

social and governance (ESG) issues. Richards will work closely with the firm’s Thinking Ahead Group led by Roger Urwin, group chief executive. Richards was formerly head of UK institutional business at ISIS as well as head of manager research at Aon Consulting.
Just one UK local authority pension fund demonstrates best practice towards responsible investment, according to an assessment template produced by the UK Social Investment Forum (UKSIF).
The template on long-term responsible investment and ESG issues produced for UKSIF by Mike Taylor, chief executive of the £3.7bn London Pension Fund Authority, shows that only the Environment Agency pension fund demonstrates ‘best practice’ at level 4 compliance with the new initiative, which aims to help trustees through key ESG investment issues It ranks funds as weak (level 1), fair (level 2), good (level 3) and best practice (level 4) if they meet key criteria formulated through discussions with six key pensions “opinion formers”. Of 99 local government pension funds surveyed, 10% ranked at level 3 with remaining funds divided evenly between levels 2 and 1.
A WWF-sponsored report claims 20% of emissions reductions projects through the Kyoto Protocol’s Clean Development Mechanism (CDM) would have occurred anyway and should not have qualified for emissions credits. It said the excess claims for existing clean development projects were equal to 34 million tonnes of carbon dioxide (CO2) equivalent each year. The CDM is one of three mechanisms under the Kyoto Protocol that allows countries and companies to earn emissions credits for projects that reduce emissions in developing

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