Opening a constructive dialogue – are short-term considerations eclipsing the long-term interests of pension funds?

Today Faith Ward our Chief Responsible Investment Officer, in her role as Chair of the UK Asset Owner Roundtable, will be convening a meeting of major fund managers following the proxy season.

Concerns have been raised by several members of the UK Asset Owner Roundtable, including, Scottish Widows and the Church of England Pensions Board as well as ourselves about a perceived misalignment between our long-term interests and how investment managers are exercising proxy voting at key annual general meetings of European oil and gas majors.

We, and the other UK asset owners are concerned that despite unequivocal warnings from the United Nations and the IPCC of the risks of delayed action on climate change, that short-term interests are trumping long-term interests of pension funds.  Delayed action on climate increases the chances of a disorderly climate transition and missing the goals of the Paris Agreement.  This in turn increases the risks to pension funds long-term interests and the ability of those funds to serve the interests of their members/beneficiaries.

The meeting is intended to be a constructive dialogue to support UK Asset Owners and to ensure that our needs are effectively understood by the managers we select on behalf of our Members and the Beneficiaries we serve.

The below letter is going to be issued to all of Brunel’s Asset Managers.

We believe this is an essential step, as our fiduciary duty to our Client’s and their members requires us to consider the longer term impacts of these actions. Engaging with our Asset managers is the most sensible next step for us.