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IFC and South Africa’s POA Release Guide to Responsible Investing for Pension Funds



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 www.sustainablereturns.org.za

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, visit www.poa.org.za.

About IFC
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
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In Johannesburg:
Samantha Jagdessi
Phone: +27 (0) 82 856 0357
Email: Samantha@sustainablereturns.org.za