On 30 November 2011 – IFC, a member of the World Bank Group, signed an agreement with the Principal Officers Association of South Africa to work on the integration of environmental, social, and corporate governance issues in investment decisions. POA is a trade association of pension fund managers representing more than ZAR 2 trillion (about $250 billion) in assets under management.
The project will provide a consistent framework and set of tools for retirement funds to comply with the new Regulation 28 of South Africa’s Pension Funds Act. The regulation is pioneering on a global level in that it requires pension funds to actively consider sustainability issues in their investment decisions. This is reinforced by a number of national and international policy initiatives such as the Code for Responsible Investing in South Africa (CRISA) and the UN-backed Principles for Responsible Investment.
“Improving the environmental, social, and governance performance of businesses contributes to their financial resilience and profitability. Institutional investors have a key role to play in catalyzing innovation and investment, especially when it comes to climate change,” said Wanjiru Kirima, Chairperson of the Principal Officers Association and also the Chairperson of the project steering committee. “This project is an innovative and practical step for the industry to help address the challenges that South Africa is facing while improving returns for pensions and society.”
The project will draw on local and international best practice, including IFC’s Sustainability Framework for private sector investment in emerging markets. The Sustainability Framework reflects IFC’s strategic approach to climate change and the integration of environmental and social sustainability. The broad adoption of these practices can transform markets and improve people’s lives.
“IFC invests in priority sectors such as renewable energy, infrastructure, agribusiness and small and medium enterprises based on our sustainability framework. By working with other institutional investors we seek to leverage additional long-term and sustainable investment into such sectors,” said Saleem Karimjee, IFC Southern Africa Country Manger. “Incorporating environmental, social, and corporate governance practices can help to protect investment portfolios, especially in the light of increasing risks from climate change.”
More than a dozen institutions, including the National Treasury of South Africa, the South African Government Employees Pension Fund, Financial Services Board and the Association for Savings and Investment South Africa, will lead this initiative. These institutions comprise the steering committee of the project and have responsibilities for retirement fund investment practices in South Africa, Botswana and Namibia.
This project is supported by funding from the Norwegian Government.
About this Project
Sustainable Returns for Pensions and Society is an industry-led initiative to integrate environmental, social, and corporate governance considerations into the mainstream of retirement industry investment practices in Southern Africa. Convened by the Principal Officers Association of South Africa (POA), IFC, the Government Employees Pension Fund (GEPF), and the Association for Savings and Investment South Africa (ASISA), the project Steering Committee includes high-level representatives of the Financial Services Board (FSB), National Treasury of South Africa, Banking Association of South Africa (BASA), Botswana Public Officers Pension Fund, Congress of South African Trade Unions (COSATU), Debswana Pension Fund, Federation of Unions of South Africa (FEDUSA), Financial Planning Institute (FPI), Government Institutions Pension Fund Namibia (GIPF), Institute of Directors (IoD), Institute of Retirement funds (IRF); National Council of Trade Unions (NACTU), Pension Lawyers Association, South African Institute of Chartered Accountants (SAICA), Southern Africa Venture Capital Association (SAVCA), Telkom Pension Fund, and the UN Principles for Responsible Investment (PRI). For more information, please visit www.gepf.gov.za and www.asisa.co.za.
About the Principal Officers Association
The Principal Officers Association (POA) is a non-profit organization, and the only one of its kind in South Africa, that aims to promote the common interests of Principal Officers of retirement funds. The POA’s membership of 425 Principal Officers and associate members represent more than 6.2 million retirement fund members in South Africa. The POA also has members in Southern Africa Development Community (SADC). The principles espoused by CRISA are endorsed by the POA. For more information, visit www.poa.org.za.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit www.ifc.org.