The Sustainable Returns for Pensions and Society project responds to revised Regulation 28 of the South African Pension Funds Act, which called for integration of environmental, social, and corporate governance (ESG) issues in the investment decisions of South African pension funds. It set out to provide a consistent framework and set of tools for retirement funds to comply with the new regulation as well as the voluntary Code for Responsible Investing in South Africa (CRISA).
The project featured extensive consultation with the South African retirement investment industry over a two-year period and culminated in the release in September 2013 of “Responsible Investment and Ownership – A Guide for Pension Funds in South Africa”.
You can find out more about the Sustainable Returns project below:
What is the project ?
Sustainable Returns for Pensions and Society is a southern african, industry-led initiative to integrate environmental, social, and corporate governance (ESG) considerations into the mainstream of retirement industry investment practices. This practice is also referred to as Responsible Investing (RI).
Launched in December 2011, the project featured a pioneering partnership between Batseta (formerly the Principal Officers Association of South Africa) and IFC, part of the World Bank Group, to position southern african practitioners at the forefront of global best practice in responsible investing.
The initiative was led by a Steering Committee consisting of high-level representatives of key stakeholder institutions in the retirement industry. Implementation was undertaken by a project management committee (PMC) consisting of the Batseta (POA), IFC, the Government Employees Pension Fund (GEPF), and the Association for Savings and Investment South Africa (ASISA).
Why was the project formed ?
The revised Regulation 28 of the South African Pensions Fund Act came into effect in July 2011 and requires that retirement funds now consider ESG issues in their investment policies and practices and explain how they have done so.
The Sustainable Returns project responds to a need for capacity building and tools to support Trustees and Principal Executive Officers of pension funds to implement this new requirement.
The need to integrate ESG in investment decisions, also referred to as Responsible Investing, is reinforced by the goals and principles of the following initiatives:
- South Africa’s New Growth Path and National Development Plan 2030
- The King Code of Governance Principles for South Africa (King III)
- The Code for Responsible Investing in South Africa (CRISA)
- The United Nations-backed Principles for Responsible Investment (PRI)
What does the project aim to achieve?
The project aimed to develop a consistent framework and set of tools to help retirement funds and their service providers comply with revised Regulation 28 and the Code for Responsible Investing in South Africa (CRISA).
To achieve this objective, experts were contracted to undertake the following assignments:
- the first comprehensive survey of the state of pension fund investment decision-making in South Africa
- a review of international good practice examples to guide the development of a Southern African approach
- broad consultation with industry bodies, investment practitioners and pension fund trustees to develop an appropriate framework and tools for the southern African context.
These efforts led to the publication in September 2013 of “Responsible Investment and Ownership – A Guide for Pension Funds in South Africa”.
In addition to guidance on global and local best practice, the Guide includes a set of practical Action Steps that pension fund trustees can use as they implement the policies and systems for responsible investing and compliance with Regulation 28 of the South African Pension Funds Act.