Responsible Investment
EPPF is a signatory to the Principles for Responsible Investing. This is a set of global best practice guidelines for responsible investment.
As one of the largest pension funds by asset value in South Africa, we take our responsibility to ensure sustainable and socially responsible investment principles while earning a beneficial return for members seriously.
EPPF is a signatory to the Principles for Responsible Investing. This is a set of global best practice guidelines for responsible investment. The principles include:
- Incorporating Environmental, Social and Governance issues into investment analysis and decision-making processes.
- Being active owners and incorporating Environmental, Social and Governance issues into ownership policies and practices.
- Seeking appropriate disclosure on Environmental, Social and Governance issues by the entities in which investments are made.
We also appoint an external service provider to provide monitoring, proxy voting, and reporting services that ensure we honour our responsibilities as an active asset owner and to incorporate Environmental, Social and Governance principles in our policies.
We work with asset managers whose practices and processes are aligned with the Fund’s objectives.
We also subscribe to the Code for Responsible Investing in South Africa, which embodies similar objectives as the Principles for Responsible Investing.
Sustainability Framework
We take a long-term, responsible and sustainable approach to investment and ownership. The Fund has established an Umbrella Sustainability Policy which sets out a framework on principles and beliefs in addressing sustainability issues.
The impact of climate change is one of the key areas that we are focusing on in addressing environmental challenges that have a direct impact on our members. Global warming is creating a far-reaching impact on society and the Fund’s investments. Climate change and environmental factors can lead to material risks and opportunities for the companies and securities we invest in.
This will impact the Fund’s returns, asset valuations and asset allocation processes as an asset owner with diversified investments in the local and global market.
It is our fiduciary duty to consider financially relevant climate change risks and to manage our investments optimally on behalf of our beneficiaries.
In addition to the environmental and social risks, we are particularly concerned about some of our assets becoming “stranded”. These assets cannot be liquidated as the rest of the world considers them undesirable.
We support the Task Force on Climate Related Financial Disclosure (TCFD) and aspire to the Johannesburg Stock Exchange Sustainability Framework.
We firmly believe that financial markets need clear, comprehensive, high-quality information on the impacts of climate change, including the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.
We follow an engagement process on ESG integration and will not exclude or avoid high-carbon companies for the time being. The Fund will choose to engage investee companies on mitigation and adaptation actions to be taken.
EPPF also a signatory to Net Zero Asset Owner Alliance. We have committed to a Net Zero target by 2050 in line with South Africa’s commitments under the Paris Accord.
We will engage our asset managers (internal and external) on setting specific performance indicators and measuring climate change risk across asset classes. As part of annual due diligences, we will engage asset managers on how they monitor and manage climate change.
We will report to the FSCA, PRI, EPPF members and other stakeholders in aligning to the Net Zero targets.
