The Pension Fund Coalition is publishing a set of generic contracts aimed to help plan sponsors in establishing minimum environmental, social and governance criteria with asset managers.
The model contracts are designed to be flexible across a range of scenarios, approaches and asset classes, according to a press release, which noted although the coalition is based in the U.S., its resources are intended to be applicable to plan sponsors throughout the world.
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In the release, Hiro Mizuno, the United Nations’ special envoy on innovative finance and sustainable investments and co-chair of the coalition, said pension funds currently struggle to ensure plan ESG guidelines are considered by asset managers.
“Most public pension funds, have little control over how — or whether — their assets are invested with ESG guidelines. The model language addresses this gap by ensuring long-term value creation standards are upheld.”
The initiative has already received the approval of Gordon Fyfe, chief executive officer of the British Columbia Investment Management Corp. In the release, he said the resources published by the coalition can help portfolio managers apply ESG principles in a consistent manner.
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“Pension investors and asset managers must create long-term value for clients and beneficiaries by considering social and environmental outcomes. Standard tools like model mandates can support the approach portfolio managers take to consistently apply ESG principles.”