RESPONSIBLE INVESTMENTS
As one of the components of the FSC, SRI is a material issue for all financial services companies as part of their commitment to broad-based transformation. Santam considers responsible investing to be far more than a purely economic imperative. In light of this, we strive to drive SRI and transformation in our investment decision-making.
Our approach:
Our approach to SRI is based on the FSC prescriptions which we currently meet through targeted infrastructural investment bonds and empowerment financing. The FSC defines the type of investments required from all signatories and the amount of investment to be made – termed ‘Empowerment Financing’. However, since the release of the dti Codes, a structured national approach to empowerment was introduced which created a number of issues requiring resolution. As these have not been resolved yet, Santam, along with other financial sector companies, has had difficulties in implementing this element. In addition to the targeted investments as required by the FSC, we also invest in enterprise development in accordance with the dti Codes.
Despite these difficulties, we have identified relevant focus areas in line with the Santam sustainability management framework, and we are working towards ensuring that our investments are selected using these criteria. We are also working towards ensuring that our actions are aligned to the United Nations Principles for Responsible Investment (UNPRI), and that we report on our progress here. We have identified relevant focus areas in line with the Santam sustainability management framework, and we are working towards ensuring that, as far as possible environmental, social and governance (ESG) issues are incorporated into investment decision-making. It is our intention to encourage ESG disclosure of entities in which Santam invests in through our portfolio managers.
Our performance: - click to view text
Our aspirations for 2010:
The targeted investment target set for Santam by the FSC amounts to R234 million, based on criteria stipulated in the FSC Charter in 2003.
Investment targets are being set for the next five years and will be reviewed on an annual basis. These targets are being aligned to investment growth, B-BBEE and the UNPRI, and will be incorporated into the overall Santam transformation strategy and Santam’s environmental policy. Progress on implementation will be reported to the sustainability board sub-committee on a quarterly basis.
In addition to the FSC targeted investments, we also invest in enterprise development. The enterprise development investment target for 2010 is R31 million, which we aim to increase to R55 million by 2012. Targets are based on the dti Codes of Good Practice for Enterprise Development and will be a minimum of 3% of Santam’s long-term expected earnings after tax.
We are in the final stages of formulating a responsible investment mandate aligned to the FSC targets and the UNPRI, of which Sanlam Investment Management (SIM) is a signatory. This mandate will incorporate guidelines for Santam’s overall investment in sustainable development initiatives and our aim is to implement this mandate in 2010.
