Recommendations
The South Africa roadmap makes recommendations in four categories:
1. Regulatory guidance:
a. The South African Financial Services Board (FSB) should:
i. provide practical guidance to enhance the impact of Regulation 28 on the investment practice of South African pension schemes and actively monitor progress in scheme practice;
ii. review the implications of the size and structure of pension schemes on governance quality.
b. The FSB should review investment manager mandates to ensure that they reflect the expectations for investment practice set out in Regulation 28.
c. South African industry associations and the FSB should provide practical guidance to trustees on interaction with investment consultants on ESG integration.
2. Enhanced stewardship: The Code for Responsible Investment in South Africa (CRISA) should be supported with more resourcing and a permanent secretariat to enable its work on stewardship and responsible investment in South Africa.
3. Investor education: ESG issues should be a core competency in the National Qualification Framework for trustee training. Training and accreditation groups and industry organisations, such as Batseta and the Association for Savings and Investment South Africa (ASISA), should collaborate to provide training and raise market awareness of ESG investment approaches.
4. Corporate governance and reporting: South African stakeholders, including the FSB and the Johannesburg Stock Exchange (JSE), should review the quality of the reporting of material ESG factors following the FSB's TCFD report.
1. Regulatory guidance:
a. The South African Financial Services Board (FSB) should:
i. provide practical guidance to enhance the impact of Regulation 28 on the investment practice of South African pension schemes and actively monitor progress in scheme practice;
ii. review the implications of the size and structure of pension schemes on governance quality.
b. The FSB should review investment manager mandates to ensure that they reflect the expectations for investment practice set out in Regulation 28.
c. South African industry associations and the FSB should provide practical guidance to trustees on interaction with investment consultants on ESG integration.
2. Enhanced stewardship: The Code for Responsible Investment in South Africa (CRISA) should be supported with more resourcing and a permanent secretariat to enable its work on stewardship and responsible investment in South Africa.
3. Investor education: ESG issues should be a core competency in the National Qualification Framework for trustee training. Training and accreditation groups and industry organisations, such as Batseta and the Association for Savings and Investment South Africa (ASISA), should collaborate to provide training and raise market awareness of ESG investment approaches.
4. Corporate governance and reporting: South African stakeholders, including the FSB and the Johannesburg Stock Exchange (JSE), should review the quality of the reporting of material ESG factors following the FSB's TCFD report.
Implementation
The project team is engaging on the following priorities for 2018 and beyond:
- The South African Financial Services Board (FSB) should provide practical guidance to enhance the impact of Regulation 28 on the investment practice of South African pension schemes and actively monitor progress in scheme practice.
- Trustees should receive training on the relevance of ESG factors. In connection with this roadmap, the PRI, UNEP FI and The Generation Foundation will provide complimentary access to the trustee module of the PRI Academy for 40 trustees at pension funds across South Africa.