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How To Gain Almost No Points For Responsible Investment

Posted on January 26, 2014 at 5:30 PM

A staggering £3trillion is held in UK pension schemes. The assets under management at the Top10 of the largest UK occupational schemes exceeds £203 billion. That's a lot of money, and as we know well money can talk. But does it take the opportunity to do so if it thinks no-one is watching?

The charity ShareAction has evaluated pension schemes based on the action they take to address members' concerns about the behaviour of the businesses in which they invest. Its rankings also include how actively pension schemes use shareholder voting rights and interact with companies. These findings are out on Monday January 27, 2014.

BT and the BBC can pop some corks, as they are at the top of this new league table of the UK's occupational pension schemes for responsible investment. But shame on GlaxoSmithKline, Tata and Rolls-Royce, which were given the lowest scores, scoring just one point between them (my emphasis).

Catherine Howarth, ShareAction's CEO says: "The pension schemes we've ranked are among the UK's most powerful investors, but our survey shows that only a few take that responsibility seriously.If big employers like GlaxoSmithkline and Barclays want to improve their CSR credentials, they need to make sure their pensions schemes invest in a way that is transparent and accountable."

It's hard to know which to feel more annoyed about - GlaxoSmithkline, which ought to have realised that it has had enough bad publicity regarding corruption allegations for years to come - or Barclays, which must by now be winning prizes for the amount of hot air expended on 'ethics and culture change.'

ShareAction's scoring is out of 40 - BT and the BBC jointly had a score of 35. So how did Rolls-Royce manage to get a score of just 1 ? In celebration of transparency, ShareAction has published all the scorecards -take a look. (Note- you might not be able to until the morning as there is technically an embargo until Monday 27th but as it is already in the FT....)

More broadly, as the report points out, there is a huge disparity in the transparency and accountability of the surveyed schemes "with only two out of 26 schemes analysed fulfilling our criteria of best practice."

About 10 of 24 occupational pension schemes disclose no information on how they voted at company AGMs - another five provided basic statistics with no company-specific information, says ShareAction.

As Ms Howarth says: "There's absolutely no excuse for schemes keeping members in the dark about how their money is managed." Time for the little guy to speak up in the name of responsible investment ?

Categories: Stewardship, Investors, Governance