Human Rights and the Corporation An investor perspective

1
Human Rights and the CorporationAn investor
perspective

• Anna Pot
• Senior Sustainability Speciality
• IWG Spring Symposium London

2
Introduction to APG

• All Pensions Group management company for
  Stichting Pensioenfonds ABP (ABP Pension Trust)
  provides all services, including investment
  management
• ABP is 100 shareholder and only client
• Ca 210 billion under management on behalf of 2.7
  million ABP members
• Investments 80 internally managed
• 450 investment staff

3
Responsible Investment Policy

• Integrate ESG as widely as possible across the
  portfolio
• Compliance with UN Global Compact
• Active corporate governance and voting
• Invest in sustainability solutions
• Engage with policy-makers
• Exclude certain weapons

4
Integration into investment processes

• What it is/does
• Broader and deeper analysis of key trends and
  issues
• Better understanding of risk and opportunity
• Identify new themes
• Build stakeholder trust

• What it is not/does not do
• Deepest green only
• Large-scale exclusion
• Campaigning

5
Investor and corporate responsibility

• Seek to ensure companies operate in accordance
  with legitimate international standards UN
  Global Compact
• Screen whole portfolio
• Dialogue with companies that fall short of these
  standards
• Divestment is final option if company does not
  improve and risk to us as an investor is
  unacceptable

6
APG approach to human rights

• Take responsibility as an investor and as global
  citizen (exercise voting rights)
• Integrate in investement proces
• Step by step. Define prioritieswhere could we
  have most impact? Where are we as an investor
  most vulnerable?
• Focus areas labour standards (child labour)
• Develop routine on the way

7
APG policy and human rights

• Global Compact
• The Global Compact asks companies to embrace,
  support and enact,
• within their sphere of influence, a set of core
  values in the areas o fhuman rights, labour
  standards, the environment, and anti-corruption
• Human Rights
• Principle 1 Businesses should support and
  respect the protection of internationally
  proclaimed human rights and
• Principle 2 make sure that they are not
  complicit in human rights abuses.  

8
Looking ahead

• Challenges
• Lack of clear concepts
• (in)direct complicity
• Sphere of influence
• Lack of global norms
• Lack of level playing field
• Lack of reliable up-to-date information
• Changing political landscape

• Opportunities
• Collaborative approach investors set standards
  (develop customary law)
• John Ruggie report
• Public pressure

9
Summary

• Integration of ESG issues is enlightened
  self-interest
• Broader, deeper, better analysis of key trends
  and issues
• Demonstrate investor responsibility
• Execute our core business better

10
Appendices

• Responsible investment in alternatives
• Corporate governance

11
Corporate governance and voting

• Exercise voting rights wherever possible
• Recall all lent stock for all Dutch companies,
  all significant holdings, and special situations
• Active engagement in specific cases
• Dutch and international partnerships

12
Responsible investment in Alternatives

• Real estate developing dialogue with fund
  managers
• Timberland must be certified to FSC or, in the
  US, SFI
• Infrastructure dialogue with managers on
  environmental and social impacts e.g. Equator
  Principles
• Agricultural land social issues in southern
  Africa, environmental in Eastern Europe
• PE developing dialogue through arms length PE
  partner AlpInvest

13
Invest in sustainability solutions

• Carbon funds 500 million projected CO2
  reduction of 75-80 m tonnes 2008- 2013
• Clean technology private equity - 250 million
• Renewable energy infrastructure 100 million
• Sustainable forestry in Mozambique - 60 million
• Microcredit - 50 million

14
Strategic commitment

• Strategic Investment Plan 2007-2009
• ABP will explicitly integrate extrafinancial
  information in its regular investment process
  to contribute to the realisation of the envisaged
  risk-return profile.
• EU law requires us to base investment decisions
  on partcipants financial interests

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Why?

• Long-term perspective requires broader and deeper
  analysis
• Environmental and social trends affect business
  and investment
• Demonstrate investor responsibility