UK - The sustainable investment and finance association UKSIF has called on corporate employers to use their expertise to help their pension funds integrate sustainability.

There is still a disconnect between the degree to which major companies recognise sustainability as central and the approach that, with certain exceptions, corporate pension funds take on the issue, according to UKSIF's chief executive Penny Shepherd.

She said at the launch of UKSIF's 2011 'Responsible Business: Sustainable Pension' report: "Plan sponsors are an important stakeholder in pension funds, and pension funds value the expertise from the plan sponsors, and it makes sense to take their opinion into account. Companies could do more to assist and encourage pension funds to take responsible investment into account.

"Also, as we see a move from DB to DC, there is a really important role that companies have, which is about educating the investing public, of whom the most significant group is their employees, about the importance of sustainable development and responsible investment approaches."

This call on employer expertise falls under some of the five recommendations UKSIF has for corporate pension funds and their sponsors in the wake of its report and as a response to the Stewardship Code and the imminent Kay Review.

One area in which pension funds are significantly behind is their level of transparency, according to Shepherd.

To improve in this area, pension funds could, for example, simply put their responsible investment policies into the public domain through their website.

The UKSIF report has highlighted early signs of a step change in how corporate pension funds are responding to the case for responsible ownership and investment.

The BT Pension Scheme, the Co-operative Group Pension Scheme and F&C Asset Management's Pension Plan each achieved the highest ranking (platinum) for their implementation of sustainability.

The Barclays UK Retirement Fund, the BP Pension Fund, the Kingfisher Pension Scheme, the Lloyds Banking Group pension scheme and six other were awarded the gold category.

However, although participation in the survey has increased overall to one in five corporate pension funds surveyed - up from one in eight funds for the 2009 and 2007 surveys - 80% of corporate pension funds still did not respond at all.

Another issue raised by Sandra Carlisle from the F&C Asset Management Pension Plan was the ongoing separation of environmental, social and governance (ESG) issue and financial issues.

She said: "As soon as an issue can be quantified and you put a number on it, whether that is a carbon price, which the oil companies are now factoring in, or the EU ETS scheme, it stops in the mind of the world being an ESG factor and becomes a financial factor.

"These things are financial factors, so we need to stop having this false dichotomy between this is ESG and this is real and somehow financial.

"It is the same thing - it is all about mitigating the risk and managing the opportunity."

Elsewhere, advisory service Hermes Equity Ownership Services (EOS) has published its Corporate Governance Principles for German listed companies.

The principles emphasise certain key issues that are not sufficiently covered by the German Corporate Governance Code.

The Hermes Corporate Governance Principles for Germany highlight that, as a general rule, a chief executive should not become chairman in the German two-tier board system.

However, Hermes EOS recognises the value that former executives can bring to the work of the supervisory board.

The issue is topical at Deutsche Bank, Germany's largest banking group, which recently announced that its current chief executive, Josef Ackermann, would seek election to the supervisory board at the shareholder meeting in 2012 with a view to becoming chairman.

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