Resources

Policy
Related Initiatives
Good Practice
Published Research

Policy

Regulation 28 of the Pension Funds Act

Revised Regulation 28 of the Pension Funds Act 24/1956 in South Africa contains revised prudential guidelines for retirement fund investments, with specific reference to ESG integration, and is considered groundbreaking at international level.

Through active engagement by industry stakeholders, the language and principles were expanded to include the concept of responsible investment. As of January 2012, retirement funds must now explain how they have integrated ESG considerations in their investment policies and disclosures, or why they have chosen not to do so.

Code for Responsible Investment in South Africa (CRISA)

The Code for Responsible Investing in South Africa (CRISA) was launched on 19 July 2011. This makes South Africa the second country next to the United Kingdom to formally encourage institutional investors to integrate ESG into their investment decisions.

CRISA aims to provide the investor community with the guidance needed to give effect to the King Report on Corporate Governance South Africa (King III) as well as the United Nations-backed Principles for Responsible Investment (PRI) initiative.

Both require institutional investors to take ESG issues seriously.

FSB Circular PF 130 – Good Governance of Pension Funds

Principle 7 and Principle 8 of Circular PF 130, issued by the Financial Services Board (FSB) in June 2007, outline the responsibility of trustees to ensure that “the benefits [of pension investments] are optimised and the associated investment risks are minimised, with these opposing concepts being appropriately balanced against each other.

Related Initiatives

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United Nations-supported Principles for Responsible Investment (PRI)

PRI is an international investor initiative in partnership with United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Global Compact (UNGC).

PRI members represent a network of investors working together to put six Principles for Responsible Investment into practice. The Principles are voluntary and aspirational. They offer a menu of possible actions for incorporating ESG issues into investment practices across asset classes.

IFC Sustainability Framework for private sector investments in emerging markets.

IFC, a member of the World Bank Group, is the largest multilateral source of loans and equity finance for private enterprises in emerging markets. IFC is also a leader in applying ESG standards to investments.

IFC’s Performance Standards for environmental and social (E and S) sustainability have become a global benchmark for E and S risk management used by financial institutions worldwide, including over 80 project financers and bank signatories to the Equator Principles.

Good Practice

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Responsible property investment: What the leaders are doing (2nd ed.) (UNEP FI, 2012)

This report outlines how leading global real estate investors are integrating environmental, social, and governance (ESG) criteria into the different stages of their investment processes.

Responsible investment in farmland: a compendium of case studies (PRI, 2012)

A collection of case studies examining how PRI signatories are managing the ESG related risks and opportunities associated with investing in farmland.

IFC Sustainability Case Study: Newpack (Madagascar)

This case study showcases I and P, an IFC Private Equity client, and one of its investee companies, Newpack, a corrugated cardboard packaging SME in Madagascar.

IFC Sustainability Case Study: Cogitel (Tunisia)

This case study showcases TunInvest, an IFC client, and its investee company, Cogitel, a Tunisian company that provides flexible packaging
solutions for the food and beverage industry.

Research

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Sustainable Investment in Sub-Saharan Africa (IFC, 2011)

Sustainable investment (SI) has a strong niche foothold in Sub-Saharan Africa, anchored in South Africa, the region’s largest investment market.

Yet more work is needed, at policy and portfolio levels, to grow this investment theme.

Climate Change Scenarios – Implications for Strategic Asset Allocation (IFC, 2011)

It is widely acknowledged that climate change will have broad-ranging impacts on economies and financial markets over the coming decades.

This report analyses the extent of that impact on institutional investment portfolios and identifies a series of pragmatic steps for institutional investors to consider, including allocation to climate-sensitive assets and the adoption of an “early warning” risk management process.

Public Private Equity Partnerships: Accelerating the Growth of Climate Related Private Equity Investment (IFC, 2011)

Private Equity/Venture Capital (PE/VC) is uniquely suited to financing climate friendly investments that are risky, innovative, and relatively small.

PE/VC funds will certainly not provide more than a fraction of the $4.6 trillion investment needed — but they fill a key niche.

The State of Responsible Investment in South Africa (UNEP FI, 2007)

The report presents the findings of a joint initiative by United Nations Environment Programme Finance Initiative (UNEP FI), African Task Force (ATF), Noah Financial Innovation, and the University of South Africa (UNISA) Centre for Corporate Citizenship (CCC) to survey the approaches and perceptions of the South African investment community to environment, social and governance issues.