April 2023
04Apr

Modern slavery audits in supply chains subpar for investors

Institutional investors have become more aware of the risks of modern slavery in their portfolio companies’ supply chains, but detecting labor issues is an uphill battle as companies chase profits and the industry lacks skills to detect labor issues. In emerging Asia, where the bulk of supply chain companies are located, regulations are not yet at a level where they’re an effective deterrent, sources said. According to the United Nations, modern slavery refers to “situations of exploitation that a person cannot...

April 4, 2023
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03Apr

‘Pensions have done more than most for ESG but it’s time for more action’

If the recent Treasury sub-committee on financial services regulations ("Greenwashing: sustainability disclosure requirements") is anything to go by, there remain far too many people in and around financial services who think we are doing a good job addressing sustainability challenges. We are not. Clients are confused, and despite pockets of excellence, sustainability challenges are getting worse not better. And neither of these will be addressed by investors sidelining real world problems or inciting ambulance chasing. Conflating welcome mass-market improvements, like entry level...

April 3, 2023
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March 2023
31Mar

Sustainable Investment: Best Practice Disclosure Checklist for Pension Funds

By World Bank Group There are compelling reasons for asset owners – in particular large pension funds and sovereign wealth funds – to adopt sustainable investment, and for governments to support them in these endeavours. First, asset owners have a key role to play in providing the capital that supports national economic and development goals. Second, sustainability issues – for example, climate change, labour rights, public health – are important drivers of investment value. Third, asset owners play a key...

March 31, 2023
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31Mar

ESG and Climate Change: Pension Fund Dos and Don’ts

By Randy Bauslaugh Pension fund administrators have a fiduciary duty to prudently manage financial risks and opportunities when investing plan assets and when managing plan operations that are paid from the pension fund. This includes the financial risks and opportunities associated with climate change and other environmental, social and governance (ESG) issues. But what are the legal dos and don’ts? Plan fiduciaries will always be on solid legal ground if they take ESG information into account for financial purposes – to...

March 31, 2023
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31Mar

BlackRock calls on clients to rethink hedging strategy after UK pension crisis

BlackRock's liability-driven investment business is urging some smaller UK pension fund clients to stop splitting assets across multiple managers, as it tries to cut the complexity and risks of a strategy that imploded last year. Asset managers worry new rules to make LDI investing more robust could render the strategy unviable for some schemes, but consultants warn BlackRock's push could repel pension clients who want to minimise concentration risk. LDI, a hedging strategy used by thousands of schemes to ensure their...

March 31, 2023
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29Mar

Canada to Ask Pension Funds to Disclose Crypto Exposure

Canada's national government said federally regulated pension funds in the country will need to disclose their crypto assets exposure to the Office of the Superintendent of Financial Institutions (OSFI), as Ottawa tightens its regulatory oversight on the volatile industry. "To help protect Canadians’ retirements, Budget 2023 announces that the government will require federally regulated pension funds to disclose their crypto-asset exposures to OSFI," the government said in the new 2023 budget plan. The federal government will also work with provinces...

March 29, 2023
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27Mar

Canadian pension funds embrace ESG

Large Canadian pensions are making “impressive” progress on sustainable investments, according to the second annual Canadian Pensions Dashboard for Responsible Investing. The report examines the progress major Canadian pension funds have made in integrating ESG factors into their governance from 2020 to 2022. In just one year, the number of funds that have made public net-zero portfolio emission commitments by 2050 or sooner has grown from two to nine, which now accounts for or $1.8 trillion or 81% of total...

March 27, 2023
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24Mar

Pensions and the Nordic Welfare Model

By Torben M. Andersen Within the frame of the Nordic welfare model, pension system design has taken very different routes. While the overall aims in terms of distribution and replacement rates are similar, the division of labour between defined benefit and contribution as well as pay-as-you-go versus funded schemes differs significantly. The main characteristics of the pension systems in the Nordic countries are presented, and outcomes relating to pension adequacy in terms of poverty and replacement rates are discussed. Specific...

March 24, 2023
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24Mar

S. Korea’s pension fund posts 8.2% investment loss for 2022

South Korea's National Pension Fund reported a -8.2% investment return for 2022 and a 6.1% drop in assets to 890.5 trillion won ($706.4 billion). Domestic equity in the portfolio accounted for the biggest loss at -22.8%, followed by overseas equity at -12.3%, according to a statement by the Jeonju-based pension fund on March 2. "Domestic and overseas equity portfolios experienced a sharp drop in value due to ongoing market volatility at home and abroad triggered by the prolonged war in Ukraine...

March 24, 2023
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22Mar

Sweden’s Biggest Pension Fund Loses $2 Billion in US Bank Crises

Sweden’s largest pension fund, Alecta, is facing losses of almost $2 billion as a result of a failed investment strategy that made it one of the biggest shareholders in two collapsed US banks and another that is embroiled in the ongoing banking crisis. The scale of the losses has become clearer since the private pension group sold all of its First Republic Bank stake at a loss of 7.5 billion kronor ($728 million), according to Chief Executive Officer Magnus Billing....

March 22, 2023
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