Report slams top UK pension funds

The UK’s top pension funds have been slammed for failing to be transparent about their investment policies in environmental, social and governance (ESG) issues

The pension funds for Barclays and BP have both come under particular fire for performing poorly on transparency and demonstrating their activities, according to a report from lobby group, FairPensions, published this week.

The report says that the lack of accountability is in “sharp contrast” to the emphasis the consumerfacing brands like Barclays place on their green marketing efforts.

The UK Pension Scheme Transparency Survey 2007 examines the UK’s top 20 biggest pension funds, worth collectively £292bn and with a membership of almost 4 million people. It found that only half have a clear policy covering ESG issues and only a quarter reported on their ESG strategies. FairPensions says companies may be guilty of ignoring issues such as climate change and human rights policies when making investment decisions.

The report found that pension funds’ performance on environmental issues varied widely, with BA and BT’s pension schemes scoring highly but Barclays, BAE Systems and BP funds giving “cause for concern”.

A spokesman for FairPensions says it is “surprising and worrying” that the funds at the bottom of the survey provide no evidence they are engaging on ESG issues and some do not disclose their investment voting practices, failing to meet industry best practice standards. The Government can demand voting disclosure but had been encouraging funds to disclose voluntarily. The failure of many to do so raises the prospect of a regulatory clampdown.

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