Johannesburg, South Africa, September 17,
2013 - IFC, a member of the World Bank Group, and the Principal Officers
Association of South Africa today launched a comprehensive guide designed
to help retirement fund managers and others better assess and manage the
environmental, social, and governance risks of the investments they make,
ensuring a more stable financial future for millions of South African pensioners.
The publication, Responsible Investment
and Ownership: A Guide for Pension Funds in South Africa, available
at sustainablereturns.org.za, is the result of two years of engagement
and input by the Southern African retirement industry and responds to new
responsible investing requirements for South African pension funds. It
is aimed at chairs, trustees and principal officers of retirement funds
who need practical guidance as they prepare to take their funds through
the first steps of planning and implementation.
The guide is an initiative of the Sustainable
Returns for Pensions and Society project, a joint industry initiative
led by IFC and the POA, which works closely with leading pension funds,
government, organised labour, investment service providers and the UN-supported
Principles for Responsible Investing. This Sustainable Returns project
is made possible through funding from the government of Norway.
South Africa’s Minister of Finance, Pravin
Gordhan, said, “The investment decisions of the country’s retirement
funds have a direct bearing on pensioners and the society where they will
retire. Their size means they have unprecedented power to secure sustainable
longer-term returns by insisting on high standards of environmental care,
social concern, and better governance in the assets in which they invest.”
Saleem Karimjee, IFC Country Manager for South
Africa, said, “The Sustainable Returns project aims to prepare pension
fund trustees to be informed and active owners of assets entrusted to them.
IFC aims to lead by example, with investments in emerging markets governed
by a Sustainability Framework and corporate governance standards that help
us invest in the responsible companies with high potential for good outcomes.”
In the Sustainable Returns Project’s next
phase, leading South African pension funds will participate in a pilot
program, applying the guide to expand their responsible investment policies
and practices. They will receive technical support and the opportunity
to work with peers in this space.
South Africa’s recently revised Regulation
28 calls on pension funds to consider any material factors that may affect
the performance of funds’ assets, particularly over the long term. The
Code for Responsible Investing in South Africa encourages institutional
investors to integrate environmental, social and corporate governance (often
referred to as ‘ESG’) considerations into their investment decisions,
thereby reducing risk and identifying new investment opportunities. Yet,
for many pension funds, responsible investing is still new territory.
IFC worked in partnership with the Principal
Officers Association in 2011 to support an industry-led response to South
Africa’s revised Regulation 28 and the CRISA.
About the Sustainable Returns Project
Sustainable Returns for Pensions and Society
is a southern African, industry-led initiative to integrate environmental,
social, and corporate governance (ESG) considerations into the mainstream
of retirement industry investment practices. The project was convened in
2011 by the Principal Officers Association of South Africa (POA), IFC (International
Finance Corporation), the Government Employees Pension Fund (GEPF), and
the Association for Savings and Investment South Africa (ASISA).
The initiative is led by a Steering Committee
of high-level representatives from the Financial Services Board (FSB),
National Treasury of South Africa, Banking Association of South Africa
(BASA), Congress of South African Trade Unions (COSATU), Debswana Pension
Fund, Federation of Unions of South Africa (FEDUSA), Financial Planning
Institute (FPI), Government Institutions Pension Fund Namibia (GIPF), Institute
of Directors in Southern Africa (IoDSA), Institute of Retirement Funds
(IRF), National Council of Trade Unions (NACTU), Pension Lawyers Association,
South African Institute of Chartered Accountants (SAICA), Southern Africa
Venture Capital Association (SAVCA), Telkom Pension Fund, and the UN-supported
Principles for Responsible Investment (PRI). For more information, visit
Consultants advising in the preparation of
Responsible Investment and Ownership: A Guide for Pension Funds in South
Africa were Delsus Limited and Genesis Analytics. Delsus (www.delsus.com)
provides strategic advisory services that help to develop responsible investment
markets, particularly in emerging economies. Genesis Analytics (www.genesis-analytics.com)
advises governments, companies and investors in emerging markets on strategy,
responsible investment and economic development.
About the Principal Officers Association
The Principal Officers Association (POA)
is a non-profit company (NPC), and the only one of its kind in South Africa,
that aims to promote the common interests of Principal Officers of retirement
funds. The POA’s membership of 425 Principal Officers and associate members
represent more than 6.2 million retirement fund members in South Africa.
The POA also has members in Southern Africa Development Community (SADC).
The principles espoused by CRISA are endorsed by the POA. For more information,
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector. Working with private enterprises in more than 100 countries, we
use our capital, expertise, and influence to help eliminate extreme poverty
and promote shared prosperity. In FY13, our investments climbed to an all-time
high of nearly $25 billion, leveraging the power of the private sector
to create jobs and tackle the world’s most pressing development challenges.
For more information, visit www.ifc.org