Human Rights and the Corporation An investor perspective Anna Pot Senior Sustainability Speciality IWG Spring Symposium Lo...
Introduction to APG <ul><li>All Pensions Group – management company for Stichting Pensioenfonds ABP (ABP Pension Trust) – ...
Responsible Investment Policy <ul><li>Integrate ESG as widely as possible across the portfolio </li></ul><ul><li>Complianc...
Integration into investment processes <ul><li>What it  is/does </li></ul><ul><li>Broader and deeper analysis of key trends...
Investor and corporate responsibility <ul><li>Seek to ensure companies operate in accordance with legitimate international...
APG approach to human rights <ul><li>Take responsibility as an investor and as global citizen (exercise voting rights) </l...
APG policy and human rights <ul><li>Global Compact </li></ul><ul><li>The Global Compact asks companies to embrace, support...
Looking ahead <ul><li>Challenges </li></ul><ul><ul><li>Lack of clear concepts: </li></ul></ul><ul><ul><ul><li>(in)direct c...
Summary <ul><li>Integration of ESG issues is ‘enlightened self-interest’ </li></ul><ul><li>Broader, deeper, better analysi...
Appendices <ul><li>Responsible investment in alternatives </li></ul><ul><li>Corporate governance </li></ul>
Corporate governance and voting <ul><li>Exercise voting rights wherever possible  </li></ul><ul><li>Recall all lent stock ...
Responsible investment in Alternatives <ul><li>Real estate – developing dialogue with fund managers </li></ul><ul><li>Timb...
Invest in sustainability solutions <ul><li>Carbon funds –  €500 million * projected CO2 reduction of 75-80 m tonnes 2008- ...
Strategic commitment <ul><li>Strategic  Investment Plan 2007-2009   </li></ul><ul><li>‘ ABP will explicitly integrate extr...
Why? <ul><li>Long-term perspective requires broader and deeper analysis </li></ul><ul><li>Environmental and social trends ...
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Human Rights and the Corporation: An Investor Perspective ...

  1. 1. Human Rights and the Corporation An investor perspective Anna Pot Senior Sustainability Speciality IWG Spring Symposium London
  2. 2. Introduction to APG <ul><li>All Pensions Group – management company for Stichting Pensioenfonds ABP (ABP Pension Trust) – provides all services, including investment management </li></ul><ul><li>ABP is 100% shareholder and only client </li></ul><ul><li>Ca €210 billion under management on behalf of 2.7 million ABP members </li></ul><ul><li>Investments 80% internally managed </li></ul><ul><li>450 investment staff </li></ul>
  3. 3. Responsible Investment Policy <ul><li>Integrate ESG as widely as possible across the portfolio </li></ul><ul><li>Compliance with UN Global Compact </li></ul><ul><li>Active corporate governance and voting </li></ul><ul><li>Invest in sustainability solutions </li></ul><ul><li>Engage with policy-makers </li></ul><ul><li>Exclude certain weapons </li></ul>
  4. 4. Integration into investment processes <ul><li>What it is/does </li></ul><ul><li>Broader and deeper analysis of key trends and issues </li></ul><ul><li>Better understanding of risk and opportunity </li></ul><ul><li>Identify new themes </li></ul><ul><li>Build stakeholder trust </li></ul><ul><li>What it is not/does not do </li></ul><ul><li>‘ Deepest green only’ </li></ul><ul><li>Large-scale exclusion </li></ul><ul><li>Campaigning </li></ul>
  5. 5. Investor and corporate responsibility <ul><li>Seek to ensure companies operate in accordance with legitimate international standards – UN Global Compact </li></ul><ul><li>Screen whole portfolio </li></ul><ul><li>Dialogue with companies that fall short of these standards </li></ul><ul><li>Divestment is final option – if company does not improve and risk to us as an investor is unacceptable </li></ul>
  6. 6. APG approach to human rights <ul><li>Take responsibility as an investor and as global citizen (exercise voting rights) </li></ul><ul><li>Integrate in investement proces </li></ul><ul><li>Step by step. Define priorities:where could we have most impact? Where are we as an investor most vulnerable? </li></ul><ul><li>Focus areas: labour standards (child labour) </li></ul><ul><li>Develop routine on the way </li></ul>
  7. 7. APG policy and human rights <ul><li>Global Compact </li></ul><ul><li>The Global Compact asks companies to embrace, support and enact, </li></ul><ul><li>within their sphere of influence, a set of core values in the areas o fhuman rights, labour standards, the environment, and anti-corruption: </li></ul><ul><li>Human Rights </li></ul><ul><li>Principle 1 : Businesses should support and respect the protection of internationally proclaimed human rights; and </li></ul><ul><li>Principle 2: make sure that they are not complicit in human rights abuses.   </li></ul>
  8. 8. Looking ahead <ul><li>Challenges </li></ul><ul><ul><li>Lack of clear concepts: </li></ul></ul><ul><ul><ul><li>(in)direct complicity </li></ul></ul></ul><ul><ul><ul><li>Sphere of influence </li></ul></ul></ul><ul><ul><li>Lack of global norms </li></ul></ul><ul><ul><li>Lack of level playing field </li></ul></ul><ul><ul><li>Lack of reliable up-to-date information </li></ul></ul><ul><ul><li>Changing political landscape </li></ul></ul><ul><li>Opportunities </li></ul><ul><ul><li>Collaborative approach investors set standards (develop “ customary law”) </li></ul></ul><ul><ul><li>John Ruggie report </li></ul></ul><ul><ul><li>Public pressure </li></ul></ul>
  9. 9. Summary <ul><li>Integration of ESG issues is ‘enlightened self-interest’ </li></ul><ul><li>Broader, deeper, better analysis of key trends and issues </li></ul><ul><li>Demonstrate investor responsibility </li></ul><ul><li>Execute our core business better </li></ul>
  10. 10. Appendices <ul><li>Responsible investment in alternatives </li></ul><ul><li>Corporate governance </li></ul>
  11. 11. Corporate governance and voting <ul><li>Exercise voting rights wherever possible </li></ul><ul><li>Recall all lent stock for all Dutch companies, all significant holdings, and special situations </li></ul><ul><li>Active engagement in specific cases </li></ul><ul><li>Dutch and international partnerships </li></ul>
  12. 12. Responsible investment in Alternatives <ul><li>Real estate – developing dialogue with fund managers </li></ul><ul><li>Timberland must be certified to FSC or, in the US, SFI </li></ul><ul><li>Infrastructure – dialogue with managers on environmental and social impacts – e.g. Equator Principles </li></ul><ul><li>Agricultural land – social issues in southern Africa, environmental in Eastern Europe </li></ul><ul><li>PE – developing dialogue through arm’s length PE partner AlpInvest </li></ul>
  13. 13. Invest in sustainability solutions <ul><li>Carbon funds – €500 million * projected CO2 reduction of 75-80 m tonnes 2008- 2013 </li></ul><ul><li>Clean technology private equity - €250 million </li></ul><ul><li>Renewable energy infrastructure – €100 million </li></ul><ul><li>Sustainable forestry in Mozambique - €60 million </li></ul><ul><li>Microcredit - $50 million </li></ul>
  14. 14. Strategic commitment <ul><li>Strategic Investment Plan 2007-2009 </li></ul><ul><li>‘ ABP will explicitly integrate extrafinancial information in its regular investment process … to contribute to the realisation of the envisaged risk-return profile.’ </li></ul><ul><li>EU law requires us to base investment decisions on partcipants’ financial interests </li></ul>
  15. 15. Why? <ul><li>Long-term perspective requires broader and deeper analysis </li></ul><ul><li>Environmental and social trends affect business and investment </li></ul><ul><li>Demonstrate investor responsibility </li></ul>

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