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Social responsible investment, decent work and pension funds
4. Good practices
In the following pages, an examination will be made of five case studies, ranging from Thailand, Brazil, the United States, Norway, and South Africa, each of which will provide
concrete examples of what a socially responsible pension fund can do. It will be seen that elements of the business case, as well as the concepts introduced above, are found in the
case studies.
4.1. Government Pension Fund Thailand
The Government Pension Fund GPF is one of the largest institutional investors in Thailand. It operates as a body autonomous of the Ministry of Finance.
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4.1.1. The rationale behind responsible investment
As one of Thailand’s largest funds and a long-term investor, the GPF plays a central role in the development of the Thai economy. The Fund considers the introduction and promotion
of good investment practices in Thailand to be one of its main goals. It also believes that the development of a sustainable pension system is good for fiscal management, that it will
help strengthen the Thai economy, and that its investment decisions will have a dual impact on both share prices and corporate and market practices.
In order to ensure its own credibility, GPF believes that it must guarantee that its own operations follow high standards of corporate governance. In this respect, the Fund sees the
benefits of good corporate governance as being bi-dimensional – with respect to both the Fund’s own performance and its role as a responsible investor, which takes into account
companies’ corporate governance practices in its investment decisions. The GPF’s investment policy is based on a series of guidelines, and its policy statements include CSR
guidelines including PRI principles, pension fund governance, proxy voting guidelines, and governance rating methodology.
4.1.2. Responsible investment approach
The GPF combines strategies in its approach to responsible investment by first practising negative screening, excluding companies if any of the following activities are evident:
Pollution and environmental problems; Breaches of intellectual property law;
Impediments to good morals and customs; Social problems and the endangerment of public security;
Questionable accountability. In an example of the GPF’s strategy, the Fund does not invest in the alcoholic beverages
sector as this runs counter to the values of most Thai people and the GPF does not wish to offend its beneficiaries.
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Information provided in this section comes from the UNPRI website, http:www.unpri.org; the Government Pension Fund website, http:www.gpf.or.thEngwhat.asp; and Responsible investment
in focus: How leading public pension funds are meeting the challenge UNEP FI, 2007.
Social responsible investment, decent work and pension funds
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The GPF also assesses the corporate governance of the companies it invests in according to a rating system inspired by the OECD Principles of Corporate Governance. The rating
system’s criteria include shareholder rights, board quality, accountability, disclosure and transparency. In line with its CSR Guidelines – which follow the OECD Guidelines for
Multinational Enterprises – and the UNPRI, the GPF has extended its responsible investment focus to include performance on environmental and social issues.
The GPF votes at the general meetings of Thai companies in accordance with its corporate governance and voting guidelines, in accordance with US corporate governance best
practice and the OECD Principles of Corporate Governance. It also practises ongoing engagement by asking questions at companies’ annual general meetings, participating in
seminars, brainstorming sessions and sitting on various working-group committees.
In addition, the GPF works with other investors such as insurance companies to encourage improvements at the level of both individual companies and markets. It signed the UNPRI when
they were launched, as it was a member of the investor group that created them in the first place.
4.2. PREVI Brazil
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