Two more Danish pension schemes have quit the UN-supported Principles for Responsible Investment (PRI) after six funds announced last week that they were leaving over governance concerns at the initiative. LD Pension and Tryg Pension have joined the six Danish schemes that left the PRI on December 13.
LD Pension, or Lønmodtagernes Dyrtidsfond, is a supplementary lump-sum pension scheme covering employees who were working at the end of the 1970s. It had DKK52.5bn (€7bn) of assets under management at the end of 2012. Tryg is the pension fund of the Danish life and insurance company of the same name. Danish pension funds ATP, Industriens Pension, PensionDanmark, PFA, PKA and Sampension announced last week that they were resigning their PRI membership citing poor governance over a “sustained period” at the London-based body. The Danish exodus has led to an instant response from the PRI, which says it plans to appoint an external independent advisor to work with the Governance Committee of its Advisory Council and its new Council Chair to review the PRI’s governance. The PRI plans to announce a successor to Wolfgang Engshuber, the outgoing Chair of the PRI Advisory Council, in early 2014. The decision to appoint the independent advisor was made yesterday at a joint teleconference of the PRI Advisory Council and PRI Association Board. A spokesman for the PRI said the decision on the appointment of the independent advisor had not yet been taken.
The PRI Advisory Council’s Governance Committee, which is chaired by Priya Mathur, a board member at CalPERS, and whose members are Marcel Barros (board member, PREVI, Brazil), Niels Erik Petersen (CIO, Unipension, Denmark), Daniel Simard (CEO, Bâtirente, Canada) and Eric Wetlaufer (Senior Vice President, Public Market Investments, CPPIB, Canada), will work with the Advisory Council to finalise the scope for the PRI’s governance review and a request for tender for the independent advisor by the end ofJanuary. The PRI said its signatories will also have an opportunity to provide input into the scope of the governance review. It said the Governance Committee would oversee the review process until the new Council Chair is appointed, which expected to occur by the end of March 2014. At a joint meeting in Cape Town on 30 September, the PRI Council and Board agreed to carry out a formal review of the PRI’s governance structure and processes, following complaints from Nordic signatories. In a letter to signatories, Mathur and Fiona Reynolds, PRI Managing Director, said: “The PRI recognises that as it calls on investors globally to drive improvements in the governance of companies and markets, it must set an example and match the levels of accountability and transparency it expects of its signatories. Improving and adapting the PRI’s governance processes to ensure they meet the needs of signatories remains a priority for the organisation. The pace of change within the PRI and the widening scope of activities now being undertaken by the organisation on behalf of signatories, as well as the recent decision by several Danish signatories to publicly delist due to governance concerns, highlights why a review of PRI’s governance is both timely and necessary. The PRI is committed to ensuring this review is carried out to the highest standards of independence, impartiality, transparency and accountability, and that its findings and recommendations – along with any subsequent changes to PRI governance as a result of the review – are clear, practical, understood and supported by signatories via our decision-making processes.”
Read RI’s coverage of the Danish pension fund departures from the PRI
Six Danish pension funds leave UN-supported Principles for Responsible Investment
The Danish bombshell may not be the last revolt PRI has to deal with
Analysis: ATP’s reasons for leaving the PRI read like an indictment
RI Interview: PRI MD Fiona Reynolds on Danish pension funds’ departure