South Africa issues draft responsible investing code for institutions

“Simple, yet powerful, voluntary principles” released for comment

A panel chaired by John Oliphant, investment head at South Africa’s R700bn (€75.4bn) Government Employees’ Pension Fund (GEPF), has issued a draft code on responsible investment for the country’s institutional investors .
The Committee on Responsible Investing by Institutional Investors in South Africa, which comprises various institutional investors, asset managers and other bodies, has issued the eight-page document for public comment by the end of October.
The new code aims to build on the United Nations Principles for Responsible Investment and ensure that institutions actually implement environmental social and governance (ESG) policies.
Like South Africa’s King Report on Corporate Governance (King III), the new code is based on a set of “apply or explain” principles.
Oliphant said: “Responsible investing and corporate governance guidelines in South Africa are largely voluntary. The code aims to put in place the checks and balances needed to make this voluntary framework successful.” He said the draft code consists of “simple, yet powerful, voluntary principles that encourageinstitutional investors and their service providers to put in place certain measures aimed at ensuring responsible investing”.
There are four main principles to the code. The first two encourage policies that aim to guide an institution’s approach to being responsible shareholders. Principles three and four require institutional investors to ensure that the principles are implemented, upheld and disclosed.
Oliphant added: “This is your chance to add to our framework. Once finalised, the beneficiaries of your investment decisions will expect you to implement this code and to disclose the practices you have committed to.” Institutional investors will be responsible for ensuring that third party service providers also adhere to the provisions of the code and the relevant policies implemented by institutional investors.
Committee members include GEPF, the Institute of Directors in Southern Africa, the Public Investment Corporation, Johannesburg Stock Exchange, Old Mutual, the UNPRI, Financial Services Board, Prescient and Investec Asset Management.
Link to draft code