Responsible Investor

Andreas Knörzer, managing director and head of sustainable investment at Sarasin, the Swiss fund manager, outlined why water was such a dominant theme at present: “By 2025, two thirds of the world’s population will be in water-stressed areas.” He said the manager was particularly focused on water efficiency technologies in its investments and said portfolio holdings also had to meet its internal sustainability requirements.
Sadly asset owners were thin on the ground, diluting that necessary connection between capital owners and the implications of their investments. One example was a discussion on whether environmental, social and governance practices provide risk reduction for pension funds. Heather White, founder and president of New-Standards, a research company on global workplace standards, pressed Lake at APG as to how investors could ensure they are not complicit with controversial projects that could have reputation and financial repercussions.
His response was that it is difficult, particularly when companies can be selective about transparency: “There is a large mining company that we are engaging with that has told us that criticism against it is a result of a complete misunderstanding by local activists without all the facts. They asked us if we wanted the full story, which of course we did. But the real risk is that the company gives investors the facts but not stakeholders in the community!”
Kris Douma, head of responsible investment and active ownership at MN Services, which runs €60bn in assets for 15 Dutch pension funds, gave some idea of the scale

of engagement now being undertaken by fund managers: “We are in discussion with around 40-50 companies that are not currently complying with the Global Compact. We are also engaging with companies such as Lundin Petroleum in Sweden about potential issues of complicity with the Sudanese government on human rights issues. We want to be sure they are being proactive in implementing some of the best practices they have identified.”

“By 2025, two thirds of the world’s population will be in water-stressed areas”

Douma explained why MN Services had joined an investor coalition to lobby Wal-mart, the US supermarket giant, over labour and commercial issues at its June 6 AGM: “We are concerned that the company has been involved in about 25 breaches of labour rights and that there are a growing number of US cities who don’t want Wal-mart to build new stores because they are perceived as being against small businesses and workers’ rights. That is material to us as investors. We want the company to report to us on these issues. We are hoping for large support and are calling for investors to join us in the resolution.”
This kind of co-operative engagement, said Douma, was becoming increasingly important: “In two months we will be joining with other investor members of the UN PRI Clearing House for a meeting with companies in Kuala Lumpur where we can talk about ESG issues in Malaysia. We have also joined another UN PRI collaboration on

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