Europe’s public sector pension funds have adopted environmental, social and governance (ESG) principles, the European Association of Public Sector Pension Institutions (EAPSPI) has revealed.

The declaration on ESG was adopted by its general assembly on 25 October 2019, in Munich, but has just been published. The declaration was prepared by a group of members of EAPSPI, but it is not intended as a substitute to the individual socially responsible investment (SRI) and ESG policies of members.

Despite adopting the ESG principles, EAPSPI highlighted that its members recognise their responsibility to ensure payment of the benefits in accordance with the promises of the pension systems they manage, while limiting and making it possible to plan the costs incurred by contributors.

“At the same time, our institutions believe they have a broader responsibility towards society and the environment, as workplaces and organisations participating in economic life. As regards asset owners’ investment process, that translates to a commitment to take into account the impact and sustainability aspects of the activities they finance.

“Moreover, as European public sector pension institutions, EAPSPI organisations are rooted in the pursuit of the public good and a social Europe. As such, they are led to aim at being exemplary in their field of activity and seek to contribute to the foundations of a liveable environment for present as well as future generations,” the declaration stated.

The association also noted that in the longer term, an inclusive society, human wellbeing and stable ecosystems are “conditions to a functioning economy and thus of the financial returns on investments”.

“Together, EAPSPI members vow to continue their exchange of expertise and information in this area where differences of approach or experience further collective understanding and progress. Leading changes in this area is a good way for public sector institutions to demonstrate exemplarity,” EAPSPI said.

The association also highlighted the work of some of its members, such as Elkarkidetza Employment EPSV from Spain’s Basque Country, which since 2016 has had an SRI policy that aims to contribute to an ESG improvement, helping to upgrade the long-term risk and return mix at the same time.

In addition, German public sector funds KZVK/VKPB for the evangelic church in North Rhine Westphalia first implemented ethical aspects in their statutes in 2009 and started to roll out ESG criteria in their investment process, which now covers all asset classes.

Share Story: