Responsible Investor

The lobby group fighting to make pensions fair

Alex van der Velden, executive director of FairPensions talks disinvestment, defined contribution, and benchmarking pension funds and asset managers for sustainability.

Responsible Investor: Can you give us a flavour of who FairPensions is and what work you do in influencing pension funds?
Alex van der Velden: FairPensions was launched at the end of 2004 by a group of NGOs (i.e. Amnesty, Oxfam, WWF) who wanted to learn more about the City of London and how to influence it. I became involved in December 2004, at the time having nothing more than a business plan written by these NGOs to specifically influence pension funds. I’d previously worked in the investment world with JP Morgan and a couple of other organisations and really wanted to do something that was a little more sustainable and ethical.
The business plan was very NGOish. It relied on fairly heavy-handed tactics and traditional NGO scare approaches, which doesn’t really work very well in this sector because people are very conservative about their money. We realised very quickly we needed to adopt a different model and so last year we moved towards a dialogue and benchmarking strategy.

We analysed the 20 largest UK pension funds on transparency and compared them to each other. We didn’t come up with a list of unachievable targets – we set a standard benchmarking project. The outcome was that UK pension funds weren’t generally being very transparent, not even including environmental and social issues. What’s interesting now is that many of them are becoming more transparent and, of course, with the problems that occurred with the credit markets this is being seen as relevant beyond ethics or environmental issues. People have realised this is a systemic risk having billions of assets in pension funds not being overseen by anyone including their own members because they don’t have the right information.
Responsible Investor: What do you think is holding pension funds back from taking a responsible investment approach?
Alex van der Velden: Pension funds do seem to be coming round to a different view on fiduciary duty. When the Freshfields report came out two years ago there was

Not a member? Register here »