ABSTRACT
Pension funds should develop an investment policy which includes an understanding of stewardship objectives and risks. This policy should encourage the incorporation of financially material extra-financial risks within investment decisions and the exercising of steward-ship responsibilities such as engagement and voting. Investment consultants provide a range of services to pension funds in the allocation and management of a fund’s assets. These services may include developing an investment policy statement, assisting in asset allocation decisions, selecting external asset managers, and helping with portfolio performance evaluation. Achieving competitive long-term returns to meet current and future retiree benefits is the primary objective of pension fund investments. Trustees should determine whether the responsible investment (RI) policy is to be applied to the entire portfolio or to specific industries, asset classes, and/or geographies. The RI policy should aim to manage those factors that are important drivers of fund’s investment risks and returns while limiting focus on factors that are not material to fund’s financial value.
