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Danish investor PenSam rejoins PRI five years after leaving over governance issues

The Nordic exodus several years ago was a major challenge for the initiative

PenSam, one of the Danish investors which quit the Principles for Responsible Investment (PRI) several years ago over the governance of the initiative, has quietly signed up again.

The departure of an initial eight Danish signatories in December 2013, followed by the departure of further investors of which PenSam was one, was a bombshell at the time and reflected anger among Nordic signatories about the way the PRI was being run.

They were upset about the PRI’s two-tiered governance structure and public policy strategy and the exodus was a significant challenge for the PRI.

One disgruntled fund, doctors fund Laegernes, even penned a statement called ‘Farewell to the PRI’ in which it said that dissatisfaction with the organization has meant that almost all Danish pension funds had decided to leave and it would follow suit.

It was felt that changes at the PRI meant that signatories had less impact on decisions.
At one time there were just four Danish asset owner signatories. Now, following the re-admission of PenSam, there are 10 Danish asset owner members – out of a total 32 PRI signatories in Denmark in total.

“PenSam has followed PRI’s development since 2013, and we are very satisfied with the changes in PRI’s governance over the years,” a PenSam spokesperson said. “PRI has both made changes to policies and management structure. Secondly, the PRI has increased visibility regarding the organisation’s plans and decisions.” Even while it was not part of the PRI, PenSam still complied with the principles.

“We welcome PenSam back to the PRI,” said PRI CEO Fiona Reynolds, “and we look forward to working with them to move responsible investment forward.”

Another recent Danish asset owner signatory is AP Pension, which signed up last month. Other prominent leavers had signed back up earlier, such as ATP in January 2017. But the likes of Laegernes and Industriens have still not signed back up.

Four years ago, almost to the day, Reynolds took to the pages of Responsible Investor to address the issue:

“Rather than see the situation with the Danish signatories as a purely negative development, we listened to their feedback and used it as an opportunity to re-examine our governance structure in order to see what we could do better.”It led to the PRI setting up a formal review of its governance and in January 2015 signatories voted for a new board governance structure and revised Articles of Association for the PRI Association.

However, there was further turmoil later that year when a group of fund manager critics banded together to say the body had the PRI had lost its way. This resulted in “activist candidate” Sandra Carlisle (then of Newton, now Head of Responsible Investment at HSBC AM) becoming a PRI board member.

“We are very satisfied with the changes in PRI’s governance”

In other news, academics fund MP Pension has exited DKK80m (€10.7m) worth of holdings after releasing a position paper on companies linked to armed conflict. The companies include Moroccan state-owned fertiliser producer OCP Group (Western Sahara), Germany’s HeidelbergCement (mining in Palestine), US tech giant Motorola Solutions (West Bank).

The Danish funds that quit the PRI in 2013/14:

ATP
• Industriens Pension
• PensionDanmark
PFA
PKA
• Sampension
• LD Pension
• Tryg Pension
• Laegernes Pensionskasse
DIP JØP
• PenSam Liv

Current Danish asset owner signatories (from PRI website):
• PenSam (Signed: February 19, 2019)
• AP Pension (January 8, 2019)
ISP Pension
• P+ (DIP/JOEP)
ATP
• Sampension
PFA Pension
PKA
• MP Investment Management A/S
• Vaekstfonden