Batseta Council of Retirement Funds for South Africa (Batseta) in collaboration with IFC’s (International Finance Corporation) integrated ESG Program, and supported by the Swiss state Secretariat for Economic Affairs (SECO), is delighted to relaunch the enhanced Responsible Investment and Ownership (RIO) Guide. It is a pivotal resource for South African retirement funds seeking to navigate the evolving landscape of responsible investing.
This comprehensive and easy-to-digest guide has been improved to provide even more essential information and tips about how funds can enhance their risk management practices, improve long-term financial performance, and contribute positively to society and the environment. The new RIO guidelines are available online with an advanced navigational and user-friendly interface. “This relaunch is a significant achievement for us. Funds now have access to the latest, best-in-class and real-world examples of ESG integration and responsible investment practices, said Anne-Marie D’Alton, CEO of Batseta.”
Key Features:
Understanding ESG Integration: The guide outlines the fundamental principles of ESG integration within the investment context, emphasising the potential benefits for both fiduciaries and members.
Policy Development: It provides detailed guidance on developing robust policies that incorporate ESG factors into the investment decision-making process. This includes establishing clear objectives, defining responsible investment principles, and setting measurable targets.
Procedures and Protocols: Practical frameworks are offered for implementing ESG considerations into day-to-day investment operations. This includes screening investments based on ESG criteria, engaging with companies on ESG issues, and voting on shareholder resolutions.
Compliance with Regulation 28: The guide ensures alignment with Regulation 28 of the Pension Funds Act, which mandates consideration of factors such as sustainability, good governance, and social responsibility in investment decisions.
New Features
The RIO Guide has added a powerful new feature which is a Self-Assessment Tool tailored for retirement funds that requires a comprehensive evaluation of and status on their funds' integration journey,
Experienced facilitators are now available to provide training sessions online or in-person via the RIO Guide. The facilitators bring a wealth of knowledge and expertise to ensure that users maximise their engagements and benefits.
“We are excited to offer training opportunities to funds to leverage the integration of the RIO Guide into their operations,” said Anne-Marie D’Alton. “Our goal is to ensure that trustees and principal officers gain the skills and confidence to integrate ESG seamlessly into their funds’ operations.”
“The value of the new self-assessment tool is that it takes what can be a complex, and even overwhelming challenge - i.e. developing and effectively implementing an Investment Policy Statement or responsible investment strategy - and breaks it into bite-sized chunks of practical actions," added Dr Rory Sullivan of Chronos Sustainability, co-designer of the new guide.
Background
In June 2019, the Financial Sector Conduct Authority (FSCA) issued Guidance Notice 1 of 2019, emphasizing the sustainability of investments and assets within retirement funds' investment policy statements, which referenced the RIO Guide.
Benefits
Enhanced Risk Management: By considering ESG factors, retirement funds can better anticipate and mitigate risks associated with environmental and social issues, thus safeguarding long-term financial returns.
Improved Performance: Investments that incorporate ESG considerations have demonstrated potential for delivering sustainable, long-term financial performance while also contributing positively to society and the environment.
Stakeholder Engagement: The adoption of responsible investment practices enhances stakeholder trust and satisfaction by aligning investment strategies with broader societal expectations and values.
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