Pension funds exist to provide retirement income for their members and, through their investment policies they can influence the activities of thousands of companies around the world, for good by encouraging good behaviour or for worse by condoning poor and even illegal actions which negatively impact the lives of real human beings.
Our world is also facing multiple crises which threaten the well-being of future generations of humans, our children and grandchildren, and indeed the viability of the ecosystems that support the existence of human beings and the various species (Biodiversity) that comprise Life on Earth.
But within chaos exists opportunities to take the bull by the horns and steer actions to achieve better outcomes for our members, their children and grandchildren, and, indeed life on Earth.
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The Royal County of Berkshire Pension Fund (RCPBF) Responsible Investment (RI) Policy
The Royal County of Berkshire Pension Fund (RCPBF) has created a Responsible Investment (RI) Policy for 2022/23 which includes a focus on some of the most critical, existential, issues facing humanity today namely Climate Change, Biodiversity Loss, and plastics pollution.
It takes a direct approach to achievement using measured metrics to evidence success.
The RI Policy also includes an inherent process that aims to increase fund value with an ever-increasing green premium and, provide members and analysts clear reports using critical metrics relating to Climate Change, Biodiversity Loss, and plastics pollution.
Click here to download a copy of the RI Policy
Click here to visit the website of the Royal County of Berkshire Pension Fund (RCPBF)
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Keys to the long-term success
Keys to the long-term success of the RI Policy are
- The setting of key areas of focus, which also fall within the United Nations Sustainable Development Goals 17 categories,
- The development of radical targets which allow us to discharge our responsibilities to future generations
- Measurement of performance against targets by each of our investees using defined, radical metrics and methodologies which will include education and training for the management of our investments to help them ultimately increase their green premium and the value of our investment in them,
- Reporting on Performance against targets using clear, radical, relevant metrics which will indicate improved performance, an increase in the green premium i.e. value of those assets, or possibly even divestment from poorly performing businesses.
- Improving performance or divestment
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What targets will we set for the companies we invest in?
The targets that we will set for investees and the managers of our investments are;
- Achieving Net Zero GHG emissions in line with “Paris Agreement 2015 and subsequent international agreements” including the setting of a Paris 1.50C Budget for each company.
- Prevention of Biodiversity Loss i.e. stemming the extinction level losses the world is currently experiencing with the eventual aim of a role in Biodiversity Restoration;
- Though the ultimate aim will be the restoration of Biodiversity (Biodiversity Restoration) to sustainable human activity levels, which many consider being last seen in the 1960s and 1970s.
- It is worth referring to concepts created by Mattis Wackernagle in his book, Ecological Footprint: Managing Our Biocapacity Budget and through the Global Footprint Network
- Minimisation, mitigation, avoidance, and elimination of plastic pollution in use and/or disposal.
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The need for education, coaching, and training
We have noticed that pension fund professionals, fund managers, and corporate managers crave a deeper understanding of key ESG factors such as Climate Change, Biodiversity loss, the use of plastics, and the impact of their organisations on these and other existential crises.
NB This also presents a new investment opportunity and an extra return on investment.
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Conclusion and invitation
There is a long way to go before the tide turns but we will continue to aim for achievement by taking on the skeptics in the industry and collaborating with other pension funds to achieve a critical mass and world-leading practice.
Whomever you represent, come and talk to us and let us collaborate on going further and faster together to greater success.
It will take all of us working together to ensure achievement by turning the tide and overcoming the evident resistance in the industry.
You can email me cllr.dacosta@rbwm.gov.uk
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Accountably yours,
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Wisdom
Cllr. Wisdom Da Costa B.Sc, FCCA, AMCT
Clewer & Dedworth West, Windsor
West Windsor Residents Association (PP14153)
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Credits
Photo by Robert Collins on Unsplash
Photo by Hannah Busing on Unsplash