SRI system provokes interest and debate
GREENCARD, a system for evaluating how companies look after the
environment, has provoked discussion in SRI circles after being made public
last month by proxy voting agency Manifest supported by Hounslow
council.
Sarah Wilson, Manifest’s managing director, said:
”There has been a lot of interest. There is a plethora of initiatives in
this area, but there are no standards, which makes it a minefield for
investors.
“GreenCard provides an excellent first base for investors,
preserving data on individual companies in a consistent format and guiding them
through the issues.”
Hounslow and Manifest used Green Card to
conduct a survey of companies’ environmental policies and behaviour. They
discussed their findings at an Edinburgh Fund Managers client conference.
After the conference, EFM director Andy Bamford told PP,
”What GreenCard is trying to do is interesting and potentially
quite useful for us, but having said that, I’ve never been a great fan of
box-ticking and I wouldn’t want investment decisions decided by an
environmental score.”
“And I’d like to think that we look at
companies very thoroughly and, if we think there’s an environmental
problem which may affect shareholder value, we’ll look into it.”
“Companies will come under our scrutiny even if
there’s just a failure to adopt best practice, because that’s often
indicative of wider problems.”
EFM, with £2bn of UK institutional pension funds
under management, achieved top quartile performance last year and above-median
performance in the past three years through good stock selection.
Hymans Robertson, the actuary with the largest number of
local authority clients, also attended the EFM conference. Consultant Geoff
Singleton told PP, “Green Card is interesting, but it is only one
of many initiatives I think will spring up. Eiris and PIRC will have their
approaches, and mainstream investment managers will enter the field with
increasing enthusiasm.”
“Over time, some consensus about the relevant
concerns will come together, but I expect to be a lot older before that
happens.”
Hounslow’s Alan Steele hopes GreenCard will
find acceptance with other local authorities. “Unlike corporate pension
schemes, we can’t say we’re not doing anything with respect to
socially responsible investment,” he said. “I think GreenCard
will help. It provides a starting point for a dialogue with the companies you
own.
“SRI is about engagement and dialogue. It’s only when
that’s failed that you think about disinvesting.”
Professional Pensions
16 March, 2000
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