Danish pension funds return to PRI after three years

ATP, PFA, PKA and Sampension confirmed in a joint statement on December 8 that they had decided to resume membership of the UN’s Principles for Responsible Investment.

They were among six Danish institutions that announced they would be leaving the PRI in December 2013, citing failures to live up to basic requirements on good corporate governance and member democracy.

The PRI, which was set up in 2006 and represents about $ 60 trillion in assets, has since undertaken a governance review, which entailed it ditching its two-tier governance structure for one 13-member governing board, made up of asset owners, managers and service providers, which have been voted for by members.

The pension schemes said the decision had been made after three years of “critical dialogue” with the PRI, and that during the period they still complied with the PRI’s principles.

They added: “The four Danish pension companies note that the PRI’s board has listened to the criticism that lead to the pension companies’ exit three years ago…The four companies are satisfied that PRI has listened to the criticism and made important corrective arrangements in order to improve its own management. Not all managerial concerns have been dealt with, but the four pension companies jointly believe that they will be able to improve management in the PRI more by re-entering the organisation than by having no part in it.”

The PRI’s chair Martin Skancke, said it had held “constructive informal discussions” with the funds over the last few months. He added: “This overwhelming support for the new governance structure and articles of association clearly demonstrated that signatories were pleased with and supportive of these changes.”

Industriens Pensionsforsikring and PensionDanmark were among the original six to leave the PRI. They are yet to recommit to the organisation. Spokesmen for the funds said they were still not convinced by the governance overhaul.

In a statement Jens-Christian Stougaard, a senior vice president at PensionDanmark, said: “We have not had any direct discussions with the PRI since a meeting in November 2015. Hence, nothing has changed for us. When we left the PRI in 2013 it was because we observed that the governance of PRI did not live up to the standards we expect. If the organisation re-establishes the original principles of governance we will give serious consideration to re-joining. Until then we’ll continue our efforts as an active and responsible investor across asset classes and geographies.”

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