coal fund opts for green auditMay 1999
The UK’s second largest pension fund is to carry out an environmental assessment of its £20 billion investments in a bid to improve its financial performance.
Trustees of the British Coal pension fund have asked David Cadman of the Environmental Governance consultancy to look at how the fund can improve its returns by cutting investment in firms whose activities may damage the environment.
But they have decided not to extend the brief to cover ethical considerations. Cadman said his main focus was ‘not on ethical matters per se, but on environmental questions’.
Joe Barnes, deputy chief executive of the Coal Management Trustees, said the move was ‘more about investment than corporate governance’.
‘There’s no doubt that there is a general increase in interest among financial institutions in the environmental risks inherent in their investment portfolios,’ said Cadman.
‘By and large they’re looking for answers to two questions: what levels of risk they are exposed to, and how well those risks are being managed by the companies they invest in,’ he added.
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