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London School of Economics signs up to PRI as asset owner

Influential school joins ranks of academic institutions signed up to initiative

The London School of Economics and Political Science, the home of the Grantham Research Institute on Climate Change and the Environment, has become an asset owner signatory of the Principles for Responsible Investment (PRI).

The LSE was founded in 1895 by members of the left-leaning Fabian Society such as George Bernard Shaw for “the betterment of society” and today has around 11,000 students.

According to the PRI website, the LSE signed the Principles on August 1.

It joins the ranks of academic institutions that are members of the UN-backed body, including the Harvard University Endowment, the University of Edinburgh, the University of Ottawa and the University of Tokyo.

It means the PRI now has 454 asset owner signatories. Total signatories, including investment managers and service providers, now stands at 2,532.

The LSE’s £141.6m (€154m) endowment was already managed in accordance with the six PRI principles and the LSE’s own ethical standards, according to the school’s 2018 annual report.

It added that the Investment Sub-Committee had discussed with the PRI the basis on which the School could be rated by the initiative “in respect of its endowment investment activities”. “A proposal from UNPRI is currently being considered.”

The report added that the committee had engaged with its fund managers to assess the quality and impact of their engagements with investee companies on ESG matters.“This has established a base line rating from which to assess the future development of these managers’ SRI behaviours,” it said.

Follow up discussions with managers with “shortcomings” drew explanations of their plans to improve “which will be monitored when we repeat this exercise during 2018-19”.

An LSE spokesperson said the school doesn’t have a separate pension fund but participates in the Universities Superannuation Scheme (USS) and the Superannuation Arrangements of the University of London (SAUL) and that the assets referred to are its endowment assets.

Other notable new PRI signatories include ratings agency Moody’s, which earlier this year took a majority stake in ESG house Vigeo Eiris. It signed the Principles in July. Rivals S&P and Fitch have been members since 2012 and 2018 respectively.

Other new asset owner signatories include the Alberta Teachers’ Retirement Fund Board and Denmark’s Industriens Pension, which like its fellow Danish fund PensionDanmark, has re-joined the PRI having left it six years ago in a dispute over PRI governance.

Also signing up recently have been Mexico’s Fondo Nacional de Infraestructura (FONADIN) and Canada’s British Columbia Public Service Pension Board of Trustees. Other recent high profile signatories include the German state of Hesse and the Dutch central bank.