Occupational Health & Safety

&

Socially Responsible Investment

What is Socially Responsible Investing (SRI)

• The integration of environmental and social

and governance (ESG) factors into the

investment decision making process.

•Issues include such things as environmental

performance, relations with communities,

human rights, and health and safety

•SRI investors range from individuals to many

of the world’s largest pension funds and

mutual fund companies

Growth of SRI in Europe

•Retail SRI in Europe totals more than €48.7 billion in assets – increase of 102% from year before

•Institutional SRI in Europe totals about €2 trillion

Growth of SRI in US

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2000

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1984 1995 1997 1999 2001 2003 2005 2007

$ Bi

llion

s

Year

•US$2.71 trillion in assets, up 18% from 2005

Double Bottom Line of SRISRI investors integrate ESG factors into their

investment decision making process for two main reasons.

1. Aligns investments with the values of the individual or institution.

2. To avoid risk

SRI & Risk

•SRI investors believe that companies that effectively

manage ESG factors (such as occupational health and

safety) will be more profitable in the long run.

Examples of Health & Safety Risk:

•Injuries and fatalities affect productivity

•Potential fines or lawsuits related to workplace

accident.

•Reputation and ability to attract talented employees.

Investment Policies Require Consideration of ESG Factors

•SRI investors have policies in place that REQUIRE

investments to be consistent with values and manage

ESG risk

OPSEU Pension Trust - $10 billion fund Statement of Investment Policies and Procedures

“We will be vigilant regarding the condition of workers employed and citizens affected by the companies in which we invest…we support and encourage fair wages, benefits, and working conditions for workers employed by our assets. ”

SRI and Microfinance

•MFIs increasingly attract institutional and

individual investors due to their double bottom

line

Examples of SRI Investments in Microfinance

•Calvert Investments invests approximately $25 million

in MFIs

•PGGM, large Dutch pension fund, committed US$304

million to the microfinance sector.

•Last week, PKA, the €15billion Danish pensions fund,

announced planned investment in microfinance

Gap

• MFI are increasingly using sophisticated

tools to evaluate social impact.

•Occupational health and safety is not

typically being evaluated

•Socially responsible investors, from a values-

perspective as well as from a financial risk

perspective will increasingly want to know that

the MFI’s they are investing in or may invest

in are considering safety and health issues in

the loaning process.

Need

For MFIs to attract investment dollars from large SRI funds, there

will be increasing need for:

• Consideration of health and safety issues in loan application.

•Regular monitoring of safety and health performance.

•Mechanisms that encourage continual improvement.

•Regular reporting.