The UK Sustainable Investment and Finance Association (UKSIF) have launched their second annual Ownership Day today – institutional investors are being encouraged to be ‘active owners’ and use shareholder power to make companies more sustainable.
Companies have massive power when it comes to their impact on people’s lives and on our environment. A poll commissioned by the UKSIF for Ownership Day found that 39% of respondents said that environmental, social and governance issues and other financial considerations could affect the long-term value of investments. Concerns raised by investors included human rights abuses and child labour in corporate supply chains, animal welfare abuse and reducing use of fossil fuels. When asked to pick which three issues they thought were most important for pension funds to be active about, 53% of survey participants said ensuring companies pay their fair share of UK tax. 51% also wanted pension funds to encourage companies to pay a living wage and 48% said ensuring executive pay and bonuses are not excessive was important.
There are things we can do to influence those institutional investors who work on our behalf i.e. our pension fund managers. Share Action provides a tool enabling you to email your pension fund. Through our pension schemes we own almost a fifth of British companies. This gives pension schemes enormous influence over company behaviour on environmental and social issues. In less than one minute, you can petition your pension scheme to become a responsible investor, showing your pension scheme that their members want them to be environmentally, socially and financially responsible. Seen another way, this is about you taking responsibility for the way your capital is being used to shape the world you – and future generations – live in.
If you hold any shares directly, how about becoming a Shareholder Activist, supported by Share Action? I have held a few shares with some FTSE-100 companies for many years. Increasingly I was convicted to take personal responsibility for the actions of these companies that I part owned. If holding shares was only for my own benefit (through increased share value and payment of dividends) was this not rather short-sighted and selfish? Did I want to be connected with a company involved in unethical business practices and do nothing about it? So last year I took action – I gave Share Action my proxies to attend the companies AGMs. This gave them access to the people in power and enabled them to ask questions in the public forum of the AGM on my behalf. This year I will be attending training run by Share Action and hope to attend some AGMs myself.
Blue & Green Tomorrow issued their Guide to Sustainable Investment a few days ago. It makes a compelling case for balancing the needs of people, the planet and everyone’s prosperity through how and where we invest. More than anything else, investment shapes our future. So investing in, and buying from, the companies that are leading the way on sustainability is the sensible, smart and necessary option. This guide helps you through it.
Summary of actions to take:
- Email your pension fund to petition your pension scheme to become a responsible investor.
- If you hold shares become a Shareholder Activist – by giving Share Action your proxies (it’s really easy) or attending their training and even going to an AGM yourself to build a relationship with the company you part own and ask them questions about issues that are important to you.
- Read Blue & Green Tomorrow‘s Guide to Sustainable Investment.
- Think about other aspects of your personal finances e.g. your bank and your insurance provider, and make them work for everyone’s good – see Money, money, money for more info.