The Office of Investment Management (OIM) has just released its 2019 Report on Sustainable Investing, which contains a wealth of information on the Fund’s policies and practices in this area.
“We need to integrate the principles of sustainable development into all decision-making, to shift the flow of resources towards the green, the sustainable and the equitable. Global financial systems must move in that direction.”
Antonio Gutiérrez, UN Secretary-General, address to the UN General Assembly, 22 September 2020
Examples in the report include Environmental Social and Governance (ESG) criteria becoming part of OIM’s due diligence processes across all asset classes, and how an ESG dashboard tool was developed and systematically integrated in public equities and fixed income investment practice.
Case studies show how OIM monitors publicly listed companies with dual-share structures, how it selected a private equity investment based on the firm’s commitment to ESG, and its repeated investment in a real estate company with commitment to sustainable design and construction.
“This year’s report summarizes our significant advancements in sustainable investment, as well as our vision for the future. Amid the unprecedented COVID-19 crisis, the critical importance of sustainability and delivering on the UN SDGs has never been higher. This report exemplifies an effective sustainable investment strategy that is, at the same time, safeguarding investment value and return on behalf of our participants, retirees and beneficiaries,” said Pedro Guazo, Representative of the Secretary-General for the Assets of the UNJSPF.
“We strongly believe that portfolios with a strong commitment to sustainability have the potential to provide returns that are superior to those of conventional portfolios, while exhibiting lower risk over the long term. This view has been supported by a large amount of academic research and literature”, stressed Herman Bril, OIM’s Director of Investment.
In 2019, OIM codified ESG in its Investment Policy Statement and conducted a comprehensive training of investment officers across all asset classes on ESG platforms. “Not only our commitment to sustainable investment is formally established, but we are making sure our teams have the tools to put it into practice”, Mr. Bril added.
As outlined in the report, OIM received an A+ rating from UN Principles of Responsible Investing -a rating which was again granted in 2020, see here. The Office committed to and executed divestment from thermal coal ahead of schedule, as recently announced. OIM joined the UNEP FI-led Net Zero Asset Owner Alliance in 2020 and committed to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
For more details on OIM’s sustainable investing, please read the full 2019 Report on Sustainable Investing here.