Responsible Investment Trustee Training

On Monday I went to a training day organised by the TUC and “Fair Pensions” at Congress House. This course was a “pilot” but it was encouraging that the 25 places were oversubscribed and a waiting list had to be set up. Sign of our troubled times? It was designed for trade union member nominated pension trustees and representatives. There was a good mixture of people from a range of trade unions and pension funds.

There was a series of presentations and workshops. On “busting myths about responsible investment”; “Effective Investor Engagement” (David Pitt-Watson author of the “The New Capitalists”), “Why Funds should collaborate in their Mutual Interest” (UNPRI); Asking Questions as a Trustee: How to do it effectively? And “Making headway on RI: practical ideas for implementation” (By Bernie Doeser and Catherine Howarth of Fair Pensions).

I’ll hopefully come back and in more detail on some of them another time.

Some key issues from the day (in my view) –

Don’t confuse “Responsible investment” with “Ethical investment”.

Major UK asset manager Credit Suisse had a Fair Pensions responsible investment score in 2008 of only 1 out of a possible 36 (bottom of list).

“We can all see what irresponsible investment has done to our funds”...Who could argue with a (do no harm to the wider financial system) clause in your statement of investment principles...what fund manager is going to argue that their decisions will cause harm? (David Pitt-Watson).

It costs nothing to be a UNPRI signatory (a donation is of course welcome). So why is your Pension fund or fund manager not a signatory?

Ask your fund managers (and importantly - potential ones at “beauty parades”) how many staff they have working 100% on responsible investment issues?

The over emphasis on short term 3 monthly fund performance by Pension funds has contributed to the present financial crisis.

Organise, organise and organise. Ironically, basic trade union organising values are as necessary to the effective Capital Stewardship of pension investments as in any bargaining issue. Survey your members, involve them and find out what they think? Report back regularly. Make sure that representatives are properly trained and supported by the union; make sure they have sufficient time off to properly read papers, research and plan. Work with your fellow trustees. Try to win things that are achievable.

Most importantly of all, believe absolutely and utterly that:

1. What you are doing will change things, and at the very least you will help get rid of child labour, environmental damage, overpaid executives, public corruption and unjust or unsafe Labour conditions.

2. Responsible long term investments will enhance the value of your funds and outperform rivals.