High level RI guide for South Africa published as investors implement government ESG recommendations

Pilot programme with South African pension funds to kick off following report.

A high-level guide to responsible investing for pension funds in Southern Africa has been published, with its main aim being to inform schemes in South Africa implementing the country’s revised “Regulation 28” on ESG integration and its recent Code for Responsible Investing in South Africa (CRISA).
 The guide, titled: Responsible Investment and Ownership: A Guide for Pension Funds in South Africa, was published on September 17, backed by the IFC, a member of the World Bank Group, and the Principal Officers Association (POA) of South Africa, the country’s pension fund trustee organisation. South Africa’s Regulation 28 calls on pension funds to consider material factors in their investment affecting long-term performance, while CRISA formally encourages institutional investors to integrate environmental, social and corporate governance (ESG) considerations into their investment decisions. The new report follows two years of industry engagement with the Southern African retirement industry, including Namibia and Botswana, via the Sustainable Returns for Pensions and Society project, a joint initiative led by IFC and the POA, and funded by the Norwegian government.
The research for the project was carried out by UK-based consultants Delsus, which is headed by former IFC Sustainable Financial Markets Head Dan Siddy, and Johannesburg-based economics advisor, Genesis Analytics. The project worked closely withleading pension funds, government, organised labour, investment service providers and the UN-supported Principles for Responsible Investment, which will hold its annual PRI in Person conference in South Africa next month. The guide outlines how pension funds can assess and manage ESG risks, impacts and business opportunities that could affect the financial performance of their investment portfolios. In its next phase, the Sustainable Returns Project will work with leading South African pension funds in a pilot programme to apply the guide to their responsible investment policies and practices. John Oliphant, Principal Executive Officer at the largest pension fund in Africa, the Government Employees Pension Fund, with US$131bn in assets, said: “The Responsible Investment and Ownership Guide is an excellent document, written in simple English, with clear practical examples for retirement fund trustees. The guide will go a long way to further promote responsible investment within the Southern African trustee community.” Pravin Gordhan, South Africa’s Minister of Finance, welcoming the report said: “The investment decisions of the country’s retirement funds have a direct bearing on pensioners and the society where they will retire. Their size means they have unprecedented power to secure sustainable longer-term returns by insisting on high standards of environmental care, social concern, and better governance in the assets in which they invest.
Link to report