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LONDON, 27 April 2010 – A US$1.7 trillion coalition of investors has written to 21 major companies in 14 countries asking them to improve their disclosure of bribery and corruption risks and avoidance measures.
The investors have asked companies from eight sectors, including defence, construction and capital goods, to explain whether their anti-corruption management systems adhere to international reporting frameworks developed by the International Corporate Governance Network (ICGN) and UN Global Compact.
The 20 investors behind this effort manage over US$1.7 trillion of assets in nine countries and are all signatories to the UN-backed Principles for Responsible Investment (unpri.org). They include APG, F&C Asset Management and Hermes.
George Dallas, Director of Corporate Governance at F&C Management said,
“As investors we believe that bribery and corruption are incompatible with good corporate governance and harmful to the creation of value. Therefore we expect the companies that we invest in to have robust programmes to manage corruption in their firm and supply chains, and to ensure those programmes measure up to respected international standards. The absence of such a programme or the failure to regularly monitor the management of these risks has the potential to create financial, operational and reputational risks.”
James Gifford, Executive Director of the Principles for Responsible Investment said,
“This collaboration among mainstream investors demonstrates the strong business case for fighting corruption. Corruption increases costs, risks a firm’s reputation and can inhibit economic development. The consequences of corruption are also felt acutely by the people of developing countries who miss out on vital development capital. We need markets to hold businesses to account for corruption and that needs collective action by global investors.”
Gavin Power, Deputy Director of the UN Global Compact added,
“The UN Global Compact’s reporting framework gives guidance on how companies should report on anti-corruption activities and we welcome the proactive role these investors are taking to help encourage the wide use of that guidance”.
The full list of PRI signatories participating in this engagement are: ACSI*, AP1 (First Swedish National Pension Fund), AP2 (Second Swedish National Pension Fund), AP3 (Third Swedish National Pension Fund), AP4 (Fourth Swedish National Pension Fund), APG Asset Management, BC Investment Management Corporation, Boston Common Asset Management, California State Teachers’ Retirement System (CalSTRS), Ethos Foundation, F&C Asset Management, Henderson Global Investors, Hermes EOS, Mn Services N.V., New Zealand Superannuation Fund, Rathbone Brothers Plc, Robeco, Skandinaviska Enskilda Banken (SEB) AB, Syntrus Achmea Asset Management, Victorian Funds Management Corporation.
The Australian Council of Superannuation Investors (ACSI) is a collaboration of superannuation funds and is signing on behalf of the following PRI signatories: AGEST, ARIA, AustralianSuper, CARE Super, Catholic Superannuation Fund, Cbus, ESSS, Health Super, HESTA, HOSTPLUS, LGSS (NSW), Local Super SA-NT, LUCRF, Media Super, NGS Super, Statewide Superannuation Trust, Tasplan, Telstra Super, TWU Super, UniSuper, VicSuper, and Vision Super.
The international reporting frameworks on anti-corruption practice by the International Corporate Governance Network and UN Global Compact can be found here and here . The research and technical expertise used by the investor group has been provided by Transparency International.
Principles for Responsible Investment (PRI)
The Principles for Responsible Investment, convened by UNEP FI and the UN Global Compact, was established as a framework to help investors achieve better long-term investment returns and sustainable markets through better analysis of environmental, social and governance issues in investment process and the exercise of responsible ownership practices. The Principles themselves, a full list of signatories and more information can be found at unpri.org
United Nations Environment Programme Finance Initiative (UNEP FI)
UNEP FI is a unique public-private partnership between UNEP and the global financial sector. UNEP works with over 170 banks, insurers and investment firms, and a range of partner organisations, to develop and promote linkages between sustainability and financial performance. Through its comprehensive work programme encompassing research, training, events and regional activities, UNEP FI carries out its mission to identify, promote and realise the adoption of best environmental and sustainability practice at all levels of financial institution operations. More information: www.unepfi.org
United Nations Global Compact
Launched in 2000, the UN Global Compact brings business together with UN agencies, labour, civil society and governments to advance ten universal principles in the areas of human rights, labour, environment and anti- corruption. Through the power of collective action, the Global Compact seeks to mainstream these ten principles in business activities around the world and to catalyze actions in support of broader UN goals. With more than 5300 participating businesses from over 135 countries, it is the world’s largest voluntary corporate sustainability initiative. More at: www.unglobalcompact.org