The €34bn ($54bn) French pensions reserve fund (FRR) has tendered for the appointment of an advisor to help it examine whether companies in its investment portfolios respect international accepted environmental, social and governance (ESG) standards. The fund said the advisor would be expected to scrutinise its portfolio of large and mid cap companies in developed markets before doing the same for emerging markets at a future date. The fund said it was also looking for the advisor to provide an alert system on extra-financial risks and potentially to assist it in its engagement with companies.
Deadline for applications for the advisory mandate is September 15th. In April this year, the FRR announced plans to extend its responsible investment approach to the entire range of asset classes in which it invests following an examination over whether it could apply environmental, social and governance (ESG) factors to them. In addition, the fund created a high-level responsible investment committee, including external financial and SRI-related experts to advise it on extra-financial risks. In April, the FRR said its five-year strategy on responsible investment would see it examine the integration of ESG criteria into asset classes such asnon-euro equities, bonds, property, infrastructure and private equity, as it has already done in European equities.
The FRR, which is a signatory of the UN Principles on Responsible Investment, also has about €600m ($946m) invested in pure SRI mandates with five asset managers.
It said it would carry out a special study on the question of climate change and investment as part of its strategic asset allocation review scheduled for early next year. In December 2007, Responsible Investor revealed the fund was reviewing managers for a potential allocation to clean tech mandates.
The FRR said its new responsible investment committee would help it avoid investment in companies that do not respect the UN Global Compact or the conventions of the International Labour Organisation.
The fund has divested from three US companies and one Singaporean corporation over involvement in the production of landmines in contravention of the Ottawa convention, to which France is a signatory.
Link to FRR