make funds report on SRI, says adviserJanuary 2003
Pension fund trustees who have said they take social, ethical and environmental issues into account when they invest should be forced to report annually on how they are doing so, according to the head of a UK government-sponsored sustainability body.
Jonathon Porritt, who chairs the Sustainable Development Commission, says the July 2000 pensions disclosure regulation – which required trustees to state their position on socially responsible investment – should be followed by further regulation.
In a pamphlet written with the business journalist Roger Cowe and published by Forum for the Future, Porritt argues that the regulation was ‘an important first step, but no more than that’. And he adds: ‘The next step is to require pension fund trustees who have said that they take social, ethical and environmental issues into account to report to members on how they do that and what the outcomes have been.’
Porritt says this would ensure trustees do not just pay lip service to the concept of socially responsible investment, as some non-governmental organizations have recently claimed.
He also argues that the disclosure regulation should be extended to other investors, including insurance companies, which should also be required to report on their progress.
Government’s Business claims that reliance on voluntary measures rather than regulation is severely hampering progress towards sustainable development.
‘As a result, the gap between the market leaders and the sustainability laggards gets wider and wider,’ says Porritt.
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