Why I’m supporting ShareAction’s Pension Power campaign
Posted by Robin Powell on November 14, 2017
What really excites me about the disruption taking place in global asset management is the potential to make a real difference. An important part of that, of course, is achieving better consumer outcomes — simply put, allowing investors to keep a much bigger share of their investment returns for themselves, rather than have it mysteriously disappear into other people’s pockets.
But there is an even bigger picture. Asset management, perhaps more than any other sector, has the power to change the world. According to a recent report by Willis Towers Watson, the world’s fund managers now control in excess of $80 trillion, which is more money than the whole of Europe. Pricewaterhouse Coopers has predicted that figure will rise to around $145 trillion by 2025. Those sorts of figures give asset managers enormous clout.
On a basic level, of course, the financial markets are about providing capital for human enterprise — channelling financial resources to the companies and projects that need and deserve it. In itself, that gives asset managers power to make a positive contribution to wider society. But asset allocation now accounts a very small proportion of global trading.
Much more important is the power that fund managers wield as shareholders, in ensuring not just that companies generate healthy profits, but that they also behave in an ethical and sustainable way.
ShareAction is a London-based charity that exists to make investment a force for good. Its vision is for an investment system that serves investors and society as a whole, and that helps to protect the environment.
ShareAction recently launched a campaign called Pension Power, which encourages people to take an interest in the system, to engage with pension fund trustees and other key decision-makers and, ultimately, to argue for greater openness and accountability.
Of course, people’s opinions will vary as to how to change the way that companies behave. Some pension scheme members would prefer their schemes to divest themselves of holdings in companies that don’t behave ethically or sustainably.
Personally, I see a bigger role for impact investing, for supporting firms that genuinely do make a positive difference. I also believe in shareholder activism, or changing companies from within. More importantly, I would like to see much greater prominence given to corporate governance. My view is that passive asset managers, who truly invest in companies for the long term rather than continually buy and sell stocks, have a huge opportunity to bring their pressure to bear, especially as passive’s share of global assets under management continues to grow.
But, whatever our preferred solutions, the starting point has to be greater transparency. As investors, we have a right to know how and where our money is being invested. Up until now, fund trustees and other gatekeepers have been far too distant and opaque.
That’s why I’m pleased to support Pension Power. Please join me by getting in touch with ShareAction and by watching and sharing this video that my colleagues at Ember Television have made, explaining what the campaign is all about: