HBOS and RBS pension schemes under fire over lack of transparency

Published on Sunday 26 April 2009 21:45

PENSION schemes run by banking giants HBOS and Royal Bank of Scotland have come under fire for a lack of investment transparency.

Research released today by FairPensions, a campaign body for "responsible investment", includes a performance "league table" of the UK's 30 largest pension schemes, together worth an estimated 350 billion and covering almost five million members.

The study reveals a wide variation between the apparent performance of major pension schemes in terms of managing non-financial risks, such as irresponsible lending and climate change, in companies in their portfolios and in transparency about their actions as shareholders.

Strathclyde Pension Fund is placed third out of 30 in the survey, scoring 90 per cent, while the RBS Group pension fund, at joint 19th, scores just 23 per cent and the HBOS final salary pension scheme, with a 17th place ranking, gains 28 per cent.

FairPensions, which is supported by a number of charities and trade unions, said all three schemes had statements recognising the potential impact of environmental, social or corporate governance issues on financial performance.

But it claimed the RBS scheme did not show evidence of assessing the ability of fund managers to manage those risks or of requiring a regular report on what is being done to manage the risks.

According to today's report, the HBOS scheme did not show evidence of recognising environmental, social and governance risks in its investment management agreements with fund managers.

The Strathclyde pension scheme is said to have fulfilled all of these criteria.

Meanwhile, on public transparency criteria, the Strathclyde scheme scored 95 per cent, HBOS 7.5 per cent, and RBS, rather damningly, zero per cent.

Richard McIndoe, head of pensions at Strathclyde Pension Fund, said the scheme's high ranking reflected "the commitment and effort we continue to devote to responsible investment".