PRI Advisory Council candidate dramatically quits election as fund board vetoes standing

Withdrawal exposes a loophole in the PRI election process.

Éric Loiselet, Member of the Board of Directors and Chairman of the Investment Policy Monitoring Committee at France’s €20bn ERAFP pension fund has dramatically pulled out of the election campaign for the Advisory Council to the United Nations-supported Principles for Responsible Investment (PRI), after he failed to get backing from the fund’s board for his candidacy. The withdrawal exposes a loophole in the PRI election process whereby a candidate does not have to show clear support from their organisation before being accepted on to the ballot. RI can reveal that Loiselet, a French regional politician, has stood down from the asset owner election after he said a vote of the ERAFP board went 9 to 8 against his representation of the fund in the election. Loiselet said the vote at ERAFP had split the board into two camps: one from the side of the beneficiaries, the other from the side of its employer and state-nominated representatives. In a statement, he criticised the decision, saying public pension funds did not have sufficient representation from beneficiaries and civil society. Loiselet’s candidacy was deemed eligible by the PRI and included with the voting instructions and candidate packs circulated to PRI signatories when voting opened on September 29. Loiselet said he had informed the PRI of his decision not to run on October 22. As of this morning (October 23), his name was still on the PRI web page for the elections, but has since been removed. It is understood that some PRI signatories have already voted for him. Voting closes on November 19 with the results announced in the week commencing November 24.
Loiselet was running against Mark Chaloner, Assistant Director (Investments), at the West Midlands Pension Fund, and Priya Mathur, Board Member at CalPERS
, for the two asset owner positions open on the Advisory Council. The PRI said it did not know if signatories had already voted for Loiselet because the votes are tallied by a third-party organisation. Fiona Reynolds, Managing Director of the PRI, said the fund had been informed of Loiselet’s withdrawal and that it would mean that Chaloner and Mathur are elected unchallenged. Reynolds said the PRI’s election rules said candidates should be supported by their organisations but that a clear approval document was not required: “We work on the assumption that candidates are backed by their organisations. This is not a case that we’ve seenbefore. It’s obviously very unfortunate that it has happened, and I think it is an internal issue for them. However, I think a further step going forwards is that we will have to have some form of written approval from the sponsor organisation.” Loiselet told RI that he had informed the President of ERAFP that he would be a candidate for the PRI Advisory Council at the end of July, after nominations for the PRI Advisory Council opened on June 16. The final date for nominations was August 22. Dominique Lamiot, President of ERAFP and former Secretary General of the French Ministry for Economy and Finance, confirmed the timing of Loiselet’s candidacy announcement. Lamiot said the fund had not been able to organise a full board meeting to vote on Loiselet’s candidacy until October 9. He declined to comment on Loiselet’s statement.
Sources close to ERAFP said some board members at ERAFP felt Loiselet had announced his candidacy to the fund relatively late and not sought a prior vote of approval, explaining why they had voted against. Candidates for the PRI Advisory Council must be at CIO/CEO/ board/trustee level or the most senior investment professional in an organisation. They may self-nominate, but must be seconded by another PRI signatory in the same class (i.e. asset owner). The UAW Retiree Medical Benefits Trust, the $60bn US trust fund, seconded Loiselet’s candidacy. Candidates sign a statement saying they are eligible to stand.
ERAFP is one of the largest and fastest growing public pension funds in the world. It has 4.5 million beneficiaries in the French civil service, local authorities and public hospitals, and receives close to €1.75bn in contributions each year. It has a large board of about 30 representatives of the fund’s stakeholders. Loiselet sits on ERAFP’s board as a representative of the Association of French Regions due to his position as a Councillor in the Champagne-Ardenne region of France. In his PRI candidate biography for the election, Loiselet lists a career including management consultant roles at KPMG, Deloitte, Burson Marsteller-Paris, and his own consultancy. Loiselet runs Ecostratégies, an advisor on corporate social responsibility, sustainable development
 and responsible communication. He also lists his role as one of the founders of the French SIF (FIR).