Mn Services: Responsible Investment for Pension Funds

1. Mn Services: Responsible Investment for Pension Funds Kris Douma Head of Responsible Investment Support & Active Ownership Mn Services Bangkok Investor Workshop 19-1-2009 Bangkok Capital Markets Day 20-1-2009

2. Introduction • Kris Douma, trade union (1987-2001), MP (2002-2006) and now working at Mn Services • Mn Services is a pension administrator and asset manager • Clients: more than 10 Dutch pension funds and 2 insurance companies • Industry: like PMT, PME, MITT and Koopvaardij • Company, like VOPAK, FORBO, Nutreco and SCA • more than 700 employees and almost €60 billion AUM

3. Background Responsible Investment • Long history: South Africa, weapons • Trade unions, revival of attention since late 90’s, leading to growing awareness at pension fund boards • Recently: management of ESG-risk’s (environment, social, governance) as part of fiduciairy duty • Zembla broadcast on Dutch TV: public opinion (APM’s, clustermunition, child labour, environment) • Growing number of pension funds signing UN PRI

4. Implementation of UN PRI: A first step: what is responsible? • UN PRI operationalisation in ‘guiding principles’: • Business strategy: ICGN Global Corp. Governance Principles a.o. • Corporate governance: ICGN Global Corporate Governance Principles, OECD Principles of Corporate Governance, code Tabaksblat a.o. • Human rights: UN Global Compact • Labour standards: UN Global Compact (core labour standards ILO) • Environment: UN Global Compact • Anti-Corruption: UN Global Compact • Investment nexus: OECD-Guidelines MNC’s • Disclosure: PRI

5. Implementation of UN PRI:From principles to practice! • 4 pillars: integration, exclusion, thematic and active ownership • Some examples: • Integration ESG in selection of Hedge Funds • Exclusion of companies with non compliant products (APM/Cluster) • Integration of ‘guiding principles’ investment management agreements • Active Ownership: voting, dialogue and class actions

6. Voting Policy • Recall of all voting rights from external managers, now voting 2000 companies • Starting 1-1-2008 customized voting policy, based on ‘guiding principles’ • Rhineland perspective (more than 50% independent non executives, no combined CEO-Chairman, against remuneration policy with system risks • Extensive voting instructions for shareholder resolutions: core labour standards, consultation employees, favourable to environment etc. • Recall of securities, and also voting 50% in blocking markets

7. Active ownership at home market (Eumedion) • Coöperation in Investor Platform Eumedion • AGM Fortis August 2007: major Dutch pension funds voted against take over of (parts of) ABN AMRO • Mn Services: 2008 5 AGM’s of AEX: Akzo Nobel; ArcelorMittal; Heineken; Unibail Rodamco and USG People • Mn Services gives Power of Attorney to other Eumedion-members for approximately 15 AEX-companies (Philips, Shell a.o.) • Robeco, representing Mn Services clients succesfully voted against remuneration policy Philips

8. Active ownership and high ESG-risk companies • Annual report AkzoNobel: “An unidentified risk is a threat, an identified risk is a management issue” • Companies that are non compliant with Global Compact are either excluded or part of programme of dialogue • Internal programme, contract F&C, participation in UN PRI Clearinghouse • Managing ESG-risks: some examples: • Wal-Mart • PetroChina => Soedan • Lundin Petroleum

9. Strategic active ownership • Active ownership as a means to influence risk return profile • Repsol: stake in Gas Natural, EITI a.o. • Punch Taverns: wrong timing of take over • Engaging regulators (Eumedion, situation at Continental in Germany) • Class actions programme

10. Responsible Investment for Pension Funds: hype or here to stay? • The current financial crisis • will lead to growing awareness of importance of managing risks, ESG-risks included • will lead to growing and continued public attention, both from employees and pensioners • as well as from the public at large • RI is here to stay!