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Inrate | WWF Pension Fund Rating 2018/2019

May 23, 2017

In cooperation with WWF Switzerland, Inrate has launched the latest rating study “Swiss pension funds and responsible investing – WWF pension fund rating 2018/2019”. On 4 February 2019 it was portrayed by the Swiss radio and television as part of the business magazine “ECO”.

The study assessed the 20 largest Swiss pension funds. The study analysed the extent to which these funds invest their policyholders’ money sustainably and provide transparent information about it. The rating shows that most of the pension funds examined, deal with sustainability aspects in their investments. However, only a few pension funds have consistently integrated sustainability into their investment processes and decisions. This means that the majority of the 20 largest Swiss pension funds are still relatively far from actively contributing to the transformation towards a sustainable society.

Half of the pension funds with improvements
Overall, there has been progress in many areas compared with the first rating three years ago. Almost half of the examined pension funds have improved. For the first time, three pension funds – the Bernische Pensionskasse, the Caisse de prévoyance de l’État de Genève and the Pensionskasse Stadt Zürich – achieved the “pioneer” category. They are pursuing relatively holistic approaches and are courageously making progress on important sustainability issues of the second pillar. There are four pension funds in the “pursuer” category, which is also classified as above average.
There is a need to catch up in the following valuation classes. The “upper midfield” comprises seven and thus one third of the pension funds exanimated. Two pension funds were classified in the “lower midfield” and there were no “latecomers”. Four pension funds remain non-transparent. They refrained from active participation and were assessed on the basis of publicly available information. One pension fund was rated one valuation class lower in the overall evaluation.

Only a few pension funds take climate change into account
Climate-related risks and opportunities still receive too little attention from pension funds. Only four of the 20 largest pension funds disclose a detailed strategy for dealing with climate risks for their investment activities, while two others at least publish a summary. Nevertheless, some progress can be detected compared to 2015/2016: at that time, only one pension fund had its own climate strategy.

Creating an impact
At the end of 2017, Swiss pension funds managed around 910 billion Swiss francs, equivalent to 133.1 percent of the local gross domestic product. Pension funds are thus among the largest and most influential investor groups. They are in a strong position to influence and steer the companies in which they invest. They must fully integrate environmental, social and responsible management into their investment decisions. Pension funds are among the key players when it comes to making the economy more sustainable. As shareholders and investors with a generation-spanning mandate, pension funds represent the holistic and long-term interests of their policyholders.

 

Financial market infrastructure provider SIX announced today the launch of a new climate data offering, aimed at supporting investors in reporting and monitoring of climate factors, and in climate-related investment and risk decision making.

The climate data sets, from various data providers in a range of industries, will provide clients with modelled and reported emissions data, covering over 33,000 companies globally, and bringing together multiple data sets on regulatory, historical and forward-looking climate impacts from providers including MSCI and Inrate. SIX also announced that it has recently entered into an agreement with environmental disclosure platform CDP to offer access to its global Greenhouse Gas (GHG) Emissions Dataset across various industries.

According to SIX, the new data sets come as investors increasingly require ESG and climate data to monitor investment decisions and to meet growing regulatory disclosure requirements, including the EU’s SFDR and the U.S.’ upcoming SEC Climate Disclosure Rules.

Martina Macpherson, Head ESG Product Strategy and Management, Financial Information, SIX, said:

“Understanding, measuring and managing climate risk and opportunities, as well as the impact that these can have on investment decisions, is a critical area of focus for market participants and policy makers alike. As more climate risk monitoring and reporting is required globally, the cost of compliance is increasing – both in operations and in terms of specialist ESG resources. SIX works with established providers of basic and specific ESG and climate data in the market.”