Common Questions

If you are a South African pension fund, the answer is yes. Regulation 28 of the South African Pension Funds Act No. 24 of 1956, which came into effect in July 2011, states that a pension fund’s fiduciary duty supports

A fiduciary duty requires that those who manage other people’s money act in the interests of beneficiaries and do not serve their own interests.  The most important of these duties are:  Loyalty:  Fiduciaries should act honestly and in good faith

Yes. Regulation 28 makes it clear that ESG integration as part of a Responsible Investment strategy is not only consistent with fiduciary duty, but is in fact a core element of good governance for retirement funds in South Africa:  “A

No, responsible investing does not necessarily mean lower returns, especially when investing for the long term. Responsible investing is an approach designed to protect, and possibly enhance, long-term risk adjusted returns through effective integration of ESG risks into investment decisions. 

You are not alone. It is useful to understand that different terms have evolved in different contexts to help explain the same set of practices.   Definition of Responsible Investing   According to the Principles for Responsible Investment (PRI), Responsible investment involves

Both the Principles for Responsible Investment (PRI) and the Code for Responsible Investment in South Africa (CRISA) offer a set of principles according to which investors are encouraged incorporate ESG factors into investment decisions and practices. PRI and CRISA exist

Responsible investment does not need to be complicated. Trustees also do not need to become experts on ESG matters or ESG investment strategies.  Your approach should fit the size and nature of your fund.  The RIO Guide’s Seven Steps will help

The costs of implementing ESG depend on the ESG-integration strategies chosen by the fund, but generally may relate to costs associated with bringing in ESG expertise (whether in-house or through service providers such as investment consultants and asset managers), conducting

South Africa has a highly fragmented pension fund sector. This causes pension schemes to be comparatively small on average and to suffer from the governance and capacity constraints that many small schemes in other markets face.   However, this does not

No. Exposure to a small universe of listed equities does not prevent responsible investment.  Negative screening and exclusion are only a sub-set of the available tools for responsible investment where divestment is a related and powerful tool to send a