Responsible Investment

Pension funds overcoming hurdles for ESG integration

January 28, 2013
© Photo FSinsight
http://www.youtube.com/watch?v=BBJ1S4AthQQ

Integration of ESG factors into the decision-making process creates the urge to monitor external asset managers more closely in the future, according to Martine Menko. “Pension funds should also stay in an active dialogue with them on how they integrate it and how they engage with companies. “ She does not feel it is necessary for pension funds to keep asset management more ‘close-by’ or even in-house. “It just means you have to integrate it in your monitoring process and also be accountable for it; so report to your stakeholders, be transparent about it.”

According to Menko, in the past, pension funds were too focused on the short-term returns, whilst a few more socially driven investors thought “this generation has enough so let’s focus on the future generation”. But it shouldn’t be a trade-off, she stresses: “I think as an institutional investor you should balance both: we have to have good returns now, but we have the same obligations towards tomorrow’s pensioners. One shouldn’t go at the expense of the other.”

References

The interview was recorded during ESG Europe 2012 conference, held in Amsterdam, October 2012, organized by the Responsible Investor.

This article may be reproduced according to our terms of use with attribution (and link, if online) to www.tias.edu. To be cited as: “Pension funds overcoming hurdles for ESG integration”, Martine Menko, www.tias.edu, January 28, 2013.

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