Irish reserve fund doubles ESG engagements

NPRF also extends forestry commitments

Ireland’s €24.1bn National Pensions Reserve Fund doubled its engagements on environmental, social and governance (ESG) issues with companies in 2009.
The NPRF’s new 2009 annual report states that it engaged on 1,076 issues at 323 companies in the year on matters such as executive compensation, supply chain labour practices and water scarcity. It compares to 2008’s figure of 532 ESG issues engaged on with 238 companies. Engagement is provided by Hermes Equity Ownership Services.
The NPRF report says Hermes has engaged with 29 international firms it thinks are exposed to potential climate change impact, either via direct and indirect carbon emissions or insufficient disclosure.
The year also saw the NPRF make its first investment inforestry with a €20m commitment to an Irish forestry fund run by AIB Investment Managers.

The NPRF bought around 5m semi-mature trees (but not the underlying land) from state-owned forestry firm Coillte, which will retain day-today management.
The NPRF is the sole investor in the forestry fund and has committed a further €30m “subject to successful marketing to other investors”.
A shift in asset allocation at the fund after the financial crisis means it now has a 5% target allocation to commodities and forestry, up from 2% previously.
In May, Finance Minister Brian Lenihan said that a report he commissioned last year on a resposible investing policy for the NPRF had been completed and that he would consider it “in due course”.