World Bank sets out universal disclosure blueprint for asset owners
PRESS RELEASE
WORLD BANK SETS OUT UNIVERSAL DISCLOSURE BLUEPRINT FOR ASSET OWNERS
London and Washington D.C, 23 June 2020: The World Bank Group ("World Bank") is continuing its programme of encouraging global asset owners to drive sustainability through responsible engagement in investment markets with the introduction of a universal disclosure framework for pension funds in both developed and emerging markets.
Sustainable Investment: Best Practice Disclosure Checklist for Pension Funds, has been developed with specialist consulting firm, Chronos Sustainability. It highlights the critical role of asset owners in supporting national economic and development goals, in driving investment value through sustainability issues and in fostering favourable conditions for the widespread adoption of sustainable investment. This, according to the report authors is particularly important for emerging market pension funds, where government backed asset owners are frequently the dominant actors.
The Checklist builds on and aligns with the most common disclosure frameworks in the sustainable investment arena[1] and identifies the issues that matter most to stakeholders. It is designed as a “blueprint” to help asset owners clarify their core purpose and mission, their aims and commitments to sustainability, and to set out how these translate into strategic action and targets, and the organisation's resulting performance.
In order to test its practical relevance, the Checklist was applied to a group of eight of the world's largest pension funds[2], many of whom are regarded as leaders in sustainable investment. The results in turn were taken as a proxy for how far institutional investors have come, and where there is still progress to be made. This is particularly evident within emerging markets where sustainability disclosure is often inconsistent and inadequate.
Fiona Stewart, lead financial sector specialist, Word Bank said "While the general case for asset owner disclosure is clear, it is not clear what disclosures asset owners should provide or what information would be most useful to their stakeholders, such as governments, asset managers, companies and civil society. Viewed through an emerging markets lens, where both information and capacity are scarce, the situation is foggier still."
She continued, "What we do know is that when the leading asset owners in emerging markets strengthen their commitments to sustainable investment, they can lead by example and have a catalytic effect on domestic capital markets and the investment system as a whole. These can include encouraging investment managers and investment advisers to develop and offer products that enable asset owners to deliver on their sustainable investment commitments, and this, for emerging market pension funds, provides a genuine opportunity to drive change."
Dr Rory Sullivan, Chronos Sustainability said: "This checklist not only provides a practical framework to support global asset owners in all markets in their reporting but more critically, it will help improve the quality of disclosures in this area, driving sustainable investment through the investment market as a whole."
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For further information
Amanda Williams, Director of Communications, Chronos Sustainability
amanda@chronossustainabilty.com
+44 7534 702797
Notes to editors
The full report is available at:
1. The checklist builds on and aligns with the most commonly used disclosure frameworks in the
sustainable/responsible investment area. These include:
- The Principles for Responsible Investment (PRI)Reporting and Assessment Framework
- The Investment Leaders Group Long-Term Disclosure Framework
- The Sovereign Wealth Fund Institute Linaburg-Maduell Transparency Index
- The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) CDP disclosure requirements
- The Asset Owners Disclosure Project rankings of asset owners, asset managers and insurance companies
- The VBDO ranking of Dutch pension funds
- The Responsible Investor reporting awards
2. The checklist was tested on the following asset owners in order to check its relevance:
Government Pension Investment Fund (GPIF) Japan
Norges Bank Investment Management (NBIM) Norway
Federal Retirement Thrift USA
National Pension Service (NPS) South Korea
ABP The Netherlands
California Public Employees’ Retirement System (CalPERS) USA
Canada Pension Plan Investment Board (CPP Investments) Canada
Pensioenfonds Zorg en Welzijn (PFZW) The Netherlands
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 189 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 70 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.
About Chronos Sustainability
Chronos Sustainability is an international team of professionals with a track record of delivering transformative, systemic change in the social and environmental performance of key industry sectors. Chronos works in partnership with institutional investors, industry networks, companies, governments, regulators and civil society organisations on issues as diverse as climate change, responsible investment, oceans management, animal welfare and human rights.
This document is for use by journalists and media professionals only.
This document is a not a financial promotion and is not investment advice. Unless otherwise attributed the views and opinions expressed are those of Chronos Sustainability at the time of publication and are subject to change.
© 2020 Chronos Sustainability. All rights reserved
[1]A list of common disclosures is included in the notes to editors.
[2] A list of these eight pension funds is included in the notes to editors.