The United Countries is dealing with requires a complete overview of its workforce pension fund after the Mother or father exposed that it has round one thousand million greenbacks invested in firms whose actions are or had been incompatible with core UN rules and programmes.
Established in 1948 by way of the UN common meeting, the fund supplies retirement, demise and incapacity advantages to workers. At the moment it has 203,050 beneficiaries and a marketplace price of $64bn (£45bn), of which just about $1.5bn is invested in 24 publicly traded firms. Lots of the ones firms had been or are being prosecuted for corrupt practices, implicated in human rights abuses or in environmental catastrophes.
“Those investments obviously undermine the credibility of a well-respected organisation,” mentioned Thomas Küchenmeister, managing director of Going through Finance. “How can I advertise sustainable construction and the safety of human rights and concurrently get pleasure from violations of those?”
The fund’s greatest funding is $210m (£150m) in Shell stocks. A 2011 record by way of the UN environmentproject analyzing environmental injury from oil spills in Nigeria’s Ogoniland discovered Shell to be partly accountable, noting that Shell had failed to stick to its personal interior procedures, “developing public well being and questions of safety”, the recovery of which “may just end up to be the sector’s maximum wide-ranging and long run oil clean-up workout ever undertaken”, with an estimated price of $1bn.
3 years on from the learn about, Amnesty and different teams mentioned little were executed to scrub up the air pollution, whilst additional claims are ongoing over the continued contamination led to by way of the spills. Shell insists it’s following global highest apply in its operations in Nigeria.
Barnaby Tempo, from World Witness’s oil, fuel and mining group, informed the Mother or father that “as a world chief”, the UN should make investments responsibly and “leverage its funding positions to call for that each one firms it invests in … embed tough anti-corruption measures in apply.”
“This may assist be certain UN investments aren’t wasted in firms that compete on bribery as an alternative of high quality and make allowance public cash to line the wallet of kleptocratic elites,” mentioned Tempo.
Declining to touch upon explicit firms, the UN particular rapporteur for human rights and the surroundings, John Knox, mentioned: “The United Countries has ethical and prison duties to take the lead in selling and protective human rights, together with the rights undermined by way of environmental degradation … and [should] critically believe the way to make sure that its investments are in keeping with the ones duties.
The fund additionally holds a mixed $244m in HSBC and Barclays. The pair had been pursued by way of government lately over allegations of dealing with covert monetary transactions, and feature paid loads of tens of millions of greenbacks in fines or settlements, maximum lately Barclays in 2015, over failings in anti-money laundering processes.
HSBC used to be fined a report $1.9bn in 2012 for what US prosecutors described as wilfully flouting sanctions, permitting no less than $881m in drug cash to go thru its Mexican branches.
Additionally in 2012, the USA Justice Division extracted $3bn from GlaxoSmithKline, wherein the fund holds $78m of stocks, after the pharmaceutical large pleaded in charge to failing to record drug protection knowledge, misbranding medication, and advertising and marketing anti-depressants no longer authorized to be used by way of minors to kids. The company used to be fined $490m in China, the place it used to be discovered in charge of bribing medical doctors and hospitals to push merchandise.
Küchenmeister mentioned there used to be some irony because the UN used to be a motive force in the back of the authoring of the “six rules for accountable funding” (PRI).
“With the investments in firms violating human rights, air pollution, corruption, or global regulation the UN is violating its personal rules of accountable funding,” Küchenmeister wrote in an e-mail. “It’s irresponsible and a no-go to generate pensions from grimy earnings for UN other folks [working] their complete lifestyles [to counter] the dangerous affects of businesses violating social and ecological requirements.”
The PRI have at their center environmental, social and company governance (ESG). Ultimate 12 months the UN workforce pension fund used to be awarded an A+ PRI score. Then again, an research of the fund’s most sensible 10 greatest shareholdings by way of main ESG scores company Sustainalytics labeled them as both of “vital controversy”, or “prime controversy”.
The scores replicate “affect at the setting and society”, in addition to the level to which they be afflicted by ESG problems.
Ian Richards is one in all 11 workforce representatives at the UN pension fund’s board. He informed the Mother or father that after the board met with the secretary common’s consultant answerable for the fund’s investments in March, it voiced considerations about loss of oversight.
“The whole lot with the UN is moderately difficult however that doesn’t save you us having a more in-depth take a look at this,” he mentioned. “We don’t need to in finding that our pensions are being paid from firms that cross in opposition to the values that we’ve been running for all our careers.”
A spokesperson for the UN secretary common, António Guterres, mentioned that whilst the fund does no longer touch upon explicit investments, it “does no longer consider there’s a war between its fiduciary legal responsibility to its beneficiaries and core UN targets”.
They added that the fund “addresses ESG considerations by way of explicitly prohibiting investments within the tobacco and armaments sectors”, and its coverage is constructed across the trust that: “Via deploying an lively vote casting and engagement coverage which helps NGO tasks and communities, the fund can extra successfully affect certain and sustainable exchange in keeping with our challenge.”
However Peter Frankental, director of Amnesty’s UK’s industry and human rights programme, mentioned there must be a complete overview.
“Those revelations are troubling, since the UN can’t distance itself morally from the actions of its workforce pension scheme to which it contributes financially, despite the fact that that is an impartial frame run at arm’s duration,” he mentioned, “The secretary common must set up a council on ethics that makes a decision at the exclusion of businesses from funding which violate human rights and environmental norms and requirements.”