Overall Findings 2022
This second iteration of the Global Pension Transparency Benchmark continues to reveal the need for improvement in pension transparency across the globe. Given the slow evolutionary nature of the pension industry in general, this is not an entirely surprising result.
It was heartening to see that progress is being made in some areas, particularly in respect to responsible investing, but also in governance disclosures.
The improvements seen in disclosures around responsible investing mean that this factor is no longer the lowest scoring factor. Improvements in governance disclosures mean that factor is now the highest scoring factor overall, followed by performance (the highest scoring factor in last year’s review), with cost being the lowest scoring factor.
For responsible investing, the improvements were most common among funds who were disclosing some, but not a lot of information last year. While some top scoring funds did improve on the margins, it was those funds in the middle of the rankings that showed the biggest improvement. Lamentably there was no improvement among the lowest scoring funds, 21 of which still received a score of 20 or below.
Governance scores reflected an increase in funds disclosing information about their operations as a whole, disclosing important corporate information beyond their core mission of managing assets. There was more discussion of enterprise-wide initiatives and goals, as well as increased discussion on internal compensation philosophies and diversity programs.
These two areas of improvement were often related. It seems that as pension organisations disclose more on how they steward portfolio companies, they are becoming aware that information of importance to them in this regard could similarly be of importance to their own stakeholders in relation to the fund itself.
While performance reporting at the fund level is generally well done, asset class level disclosures continue to disappoint.
More funds are quantifying their progress and goals around carbon footprint and other areas of responsible investing.
Stand alone reports on responsible investing are becoming more common, enabling funds to tell a cohesive story.