UNJSPF Press Release: UNJSPF is strengthening its Engagement and Stewardship capabilities
15 July 2019
The Office of Investment Management (OIM) of the United Nations Joint Staff Pension Fund (UNJSPF, the Fund) is pleased to announce that it has appointed Hermes EOS to further strengthen its stewardship and engagement capabilities. This is an important pillar of OIM’s approach to sustainable investing.
The Fund acknowledges its responsibility to society as part of an international organization committed to social progress. OIM believes that institutions which are able to successfully integrate environmental, social and governance (ESG) factors in their investment decision-making processes, have the potential to provide returns that are superior to those of conventional portfolios, while exhibiting lower risk over the long term. Our approach to sustainable investing is therefore entirely consistent with our fiduciary responsibility to meet or exceed our Long-Term Investment Objective.
The Fund believes that engagement, through an effective and productive dialogue with company managements, can positively affect corporate behavior, and result in effective change consistent with our overall approach to sustainable investing.
Hermes EOS will facilitate OIM’s collaboration with other institutional investors in its engagement activities related to holdings in the internally managed equity portfolios. OIM, alongside engagement and stewardship team, Hermes EOS, will engage on ESG issues to mitigate potential future financial and reputational risks, thereby helping us to better discharge our fiduciary responsibility.
Both Hermes EOS and OIM are strong advocates of sustainable investment, including developing a framework for integrating Sustainable Development Goals (SDGs). The stewardship work undertaken by Hermes EOS directly relates to and supports the SDGs.
Sudhir Rajkumar, Representative of the Secretary-General for UNJSPF Investments, stated his strong commitment to ensuring that the Fund achieves and maintains a leadership position in implementing sustainable investment strategies across its global investment portfolio. Herman Bril, Director in the Office of Investment Management, who has lead responsibility for the Fund’s sustainable investment strategy, stated that: “To fulfil our fiduciary responsibility, we are working to ensure that ESG factors are taken into account throughout the investment lifecycle and decision-making process. Partnering with Hermes EOS is a natural fit for OIM since we believe constructive engagement with company managements, in collaboration with other institutional investors, can support our sustainable investing goals.”
Dr. Hans-Christoph Hirt, Head of Hermes EOS, said: “We are thrilled to be working closely with OIM as part of the United Nations that oversees the SDGs, which have given investors a framework for robust engagement discussions with companies on the key sustainability challenges the world is facing. Our values are similar in that we aim to influence and solve problems together with stakeholders and contribute to a more sustainable environment and society. This works hand in hand with the OIM’s ambition to manage its assets prudently and optimally. Our work centres on engaging on material ESG issues, therefore mitigating risks and increasing the possibility of enhanced returns whilst ensuring the delivery of wider sustainability outcomes.”
PROFILE OF UNJSPF:
The United Nations Joint Staff Pension Fund is a defined benefit fund established by the General Assembly of the United Nations in 1948.
The Fund manages a US$65+ billion multi-asset class, global investment portfolio, 85% of which is actively managed in-house. The Fund invests globally in over 100 countries and regions and 27 currencies. The Fund invests in a broad range of asset classes, including global equities, global fixed income, private equity, real estate, infrastructure, timber, and commodities.
The Fund is entrusted to provide retirement, death, disability and other benefits and related services to over 207,000 staff and retirees of the United Nations and 23 other organizations admitted to membership in the Fund.
The Fund has a Long-Term Investment Objective of 3.5% real (net of inflation) annualized in USD terms, which it has to achieve while remaining within approved risk tolerance parameters and meeting investment criteria mandated by the United Nations General Assembly.