The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Following a recent ruling from the Executive Yuan (TaiwanÆs executive branch of government), the Labour Pension Fund says it is looking to adopt a set of SRI principles and formulate appropriate investment policies that will be gradually introduced in its $24 billion portfolio.
Socially responsible investments (SRIs) have a strong following in the US and Europe, and are gaining popularity in Asia. The United Nations, which endorses this development, defines SRIs using six basic principles that include investors being committed to environmental, social and corporate governance (ESG) issues and incorporating these into investment analysis and decision-making.
SRI investors will seek active ownership in their investment policies and practices, as well as seek ESG disclosures from the entities that they invest in. They actively promote acceptance and implementation of the ideals within the investment industry that they operate in. They also report on their activities and progress towards implementing the goals.
Lee Ruey-ji, vice chairperson of the supervisory committee at the Labour Pension Fund in Taipei, says in the near-term, the fund will begin weaning away from unethical businesses involved in labour rights violations and begin taking a more active role in shareholder activism in relation to ESG issues in companies in which it holds substantial stakes.
Given that corporate responsibility and information disclosure is still at a nascent stage in Taiwan, Lee notes investment returns are still the fundÆs primary objective. However, in the long-run, the Labour Pension Fund aims to help the domestic market improve its information disclosure standards through its own direct and outsourced investments as examples.
In future portfolio outsourcing arrangements, the fund will tweak its benchmarks to exclude so-called ôsinö industries û which typically include tobacco, alcohol and gaming establishments.
Assets under management of signatories committed to the UNÆs Principles for Responsible Investment totals $15 trillion globally. Taiwan has not inked its commitment to the UN yet, but Lee says the fund is determined to create a win-win scenario by taking care of the retirement needs of its members while helping create a better society.
The fund will continue consulting academics and experts in the area on how to formulate its investment policies in relation to SRIs. In the future, the goal is to support charitable activities with proceeds from SRIs.
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