A survey of current practice on socially responsible investment.
In July 2000, the amendment to the 1995 Pensions Act came into force, requiring all occupational pension funds to disclose the extent to which they take into account ethical, social and environmental considerations. It is now two years on, and during that time, industry journals have reported regularly on growing interest in socially responsible investment (“SRI”), numerous fund managers have taken on specialist SRI staff or expanded existing teams, and the launch of initiatives such as FTSE4Good has generated considerable public debate. But how much difference has it made to the way individual pension funds conduct their affairs?
This report aims to answer that question. The following table summarises our findings from discussions with 14 pension funds managing about 20% by value (£170bn) of the assets held by pension funds in the U.K. Most of the contacts consisted of structured interviews with those responsible for running the schemes (see Appendix A for details). The overall conclusion is sobering. Most of the examples of good practice come from a handful of these pension funds. Poor practice in relation to socially responsible investment is the norm.
