We aim to contribute to well-functioning markets, good corporate governance and sustainable business models. We support a set of international standards that contribute to a level playing field across markets, and we expect the companies in our portfolio to comply with them. We also participate in the further development of these standards.
As a market participant in 71 countries, we benefit from well-functioning and legitimate markets, global solutions to common challenges, and generally agreed international standards.
The fund is the largest of its kind in the world, and we can contribute our experience as a global investor in more than 8,800 companies. Our dialogue with these companies also gives us valuable insights.
As a long-term and global investor, the fund has a natural interest in sustainable development. We recognise a set of international principles and standards from the OECD and the UN which provide a starting point for our work with companies and other market participants. These standards largely coincide with the UN’s Sustainable Development Goals.
The G20/OECD Principles of Corporate Governance concern effective governance, such as shareholder rights, equitable treatment of shareholders, disclosure and transparency, and the responsibilities of the board. The OECD Guidelines for Multinational Enterprises are a set of government-endorsed recommendations for companies that operate internationally, intended to support sustainable development through responsible business conduct, trade and investment.
The UN Global Compact is a broad coalition between the UN and the business world that promotes corporate social responsibility and the UN Sustainable Development Goals. These goals provide a common framework for addressing key global challenges. How national authorities choose to mobilise knowledge, technology and capital to realise the goals will impact on the global economy and the fund’s long-term performance.
The UN Guiding Principles on Business and Human Rights outline roles and responsibilities for states and businesses with regard to human rights. The UN Conference on Trade and Development (UNCTAD) has also published Principles on Promoting Responsible Sovereign Lending and Borrowing.
We engage in dialogue with regulators, international organisations and standard setters in our most important markets. When we meet standard setters, our aim is to learn more about their strategic priorities and specific initiatives that can contribute to well-functioning markets and good corporate governance. We share our views with standard setters by responding to public consultations, attending meetings with experts, giving papers at conferences and participating in selected initiatives.
We communicate our views as an investor to standard setters by responding to public consultations. All of our consultation responses are published.
We contribute to the development of standards by participating in working groups and advisory committees, which typically consist of representatives from NGOs, public bodies and large companies. For example, we are a member of the Taskforce on Nature-related Financial Disclosures (TNFD), a working group under the UN charged with developing a framework that companies can use to manage and report on nature-related risks. We also contribute to the development of principles for responsible investment as a founder member and now board member of PRI, to which the fund reports annually. The report is available on PRI's website.
We are keen to increase our understanding of how good corporate governance and sustainability impact on financial risks and returns. Academic research can help improve market standards, provide access to important data and develop new insights into responsible investment. We therefore fund research projects that contribute to this process. We also work directly with researchers to gain insights into specific issues relating to responsible investment. The findings are made publicly available to help advance the state of the art.
