Ethos and six Swiss pension funds are launching an engagement programme with companies listed abroad, the Ethos Engagement Pool International (EEP International). Following the success of the dialogue programme with companies listed in Switzerland, the aim is to extend the dialogue activities to the international level. Through collective engagement, the members of the group seek to raise awareness of companies with regard to corporate governance, as well as environmental and social responsibility best practice.
Extend the dialog to companies listed abroad
As long-term investors, pension funds are interested in engaging in dialogue with investee companies aiming at achieving high standards of corporate governance and environmental and social responsibility. This reduces operational risks for companies and contributes to long term value creation. For 12 years, Ethos has continuously led this dialogue with Swiss listed companies in the framework of the Ethos Engagement Pool (EEP), which today counts 130 institutional members.
Six pension funds (see list below) with AUM of CHF 15 billion have decided to extend together with Ethos this dialogue to companies listed abroad by creating the EEP International. The aim is to act collectively via two complementary approaches: firstly, the members of EEP International will join collective initiatives launched by international investors from various countries. Secondly, Ethos will lead a direct engagement in the name of the members of the pool with a select number of large European companies chosen according to important topics of dialogue. In both cases, the collective action by investors makes them a credible dialogue partner for companies.
Fabrice Merle, CEO of CIEPP, the first pension fund to join EEP International, says: “I am convinced that dialogue and soft power are effective means for achieving significant advances in environmental and social responsibility. We are proud to join Ethos, our partner, in the development of this international dialogue.”
Support collective investor initiatives
Ethos participates since many years in international collective investor initiatives and benefits from a large network in this field. For example, after the collapse of a textile factory in Bangladesh in 2013, causing the death of more than 1’100 people, Ethos Foundation joined a coalition of more than 200 investors that addressed several demands to the large companies in the textile sector asking them to put in place rules for the respect of human rights in their supply chain. Three years after the accident, improvements have been made and more than 1600 audits of main factories have been carried out (http://www.iccr.org/iccrs-bangladesh-initiative). The list of international collaborative engagement initiatives in which Ethos participates is in Ethos’ annual report.
Vincent Kaufmann, CEO of Ethos says: «the creation of the EEP International allows pension funds to benefit from Ethos’ international network when supporting international collective engagement initiatives. In addition, they will receive detailed follow-up information regarding the impact of these initiatives”.
Guarantee the coherence of dialogue activities with investments
In order to allow the members of the EEP International to check the coherence of their dialogue activities with their investments, they have access to Ethos’ Environmental, Social and Governance (ESG) evaluations of more than 1’600 non-Swiss companies via the Ethos online platform. This includes information on major controversies in the areas of human rights and the natural environment as well as exposure of companies to controversial sectors such as arms, nuclear energy, fossil fuels, tobacco, GMOs. With this information, members of the EEP International can establish the link between the ESG profile of their stocks and the dialogue activities and, if needed, proceed to a rebalancing of their portfolios or to the exclusion of certain companies.
Founding members of EEP International (in order of adhesion):
- Caisse Inter-Entreprises de Prévoyance Professionnelle (CIEPP), Geneva,www.ciepp.ch
- Caisse de pension d’UNIA, Berne, www.unia.ch
- CAP Prévoyance, Geneva, www.cap-prevoyance.ch
- Prosperita Stiftung für die berufliche Vorsorge, Münsingen, www.prosperita.ch
- Abendrot Stiftung, Basel, www.abendrot.ch
- Prévoyance.ne, La Chaux-de-Fonds, www.prevoyance.ne.ch