Danish investors desert UN Principles for Responsible Investment

Six Danish institutions, including ATP, one of Europe's largest pension schemes, are to quit the private organisation behind the UN-backed Principles for Responsible Investment (PRI).

They said the organisation had failed to live up to the basic requirements for good corporate governance and called for an improvement in member democracy.

"This is not about destroying the PRI, but about fixing it. We want our old PRI back," said Ole Buhl, head of responsible investment at ATP, one the first PRI signatories.

But after three and a half years of engagement with the PRI, the Danish investors have lost patience. The six investors - ATP, PensionDanmark, PFA, PKA, Industriens Pension and SamPension - have more than $300bn in assets under management.

Commentators in the Nordic region suggest other large investors will follow suit.

Fiona Reynolds, PRI managing director, said: "We are devastated. This is very damaging to the PRI. The Danish investors are leaders in responsible investments and have contributed significantly to the PRI. We're taking steps to address their concerns."

The Danish pension funds will consider rejoining the organisation if governance improves. Ms Reynolds is hopeful that the PRI's governance review next year will result in the Danish funds' return.

Sasja Beslik, head of responsible investments and governance at Nordea Asset Management, said: "I think this sends a clear signal about the need for a more transparent approach to governance issues within the organisation."

Mr Beslik added that Nordea Asset Management will remain a PRI signatory to try and influence the organisation from within.

The Danish exodus comes after a longstanding rift with the PRI about changes to its governance structure in 2010 and 2011. Mr Buhl said that this in effect led to signatories losing their basic membership rights.

"A good analogy for what has happened at the PRI would be if a company suddenly takes away the voting rights from its shareholders," Mr Buhl said.

Several other Nordic pension funds are also frustrated with what they believe to be an unclear and complex governance structure. Arne Loow, head of corporate governance at Swedish state pension fund AP4, agreed that there is room for improvement and that the fund has raised issues with the PRI. Christina Kusoffsky Hillesoy, head of sustainable investments at AP3, agreed but said the benefits of being a signatory outweigh the negatives so far.

Earlier this year, a group of 30 Nordic investors tried but failed to get a Nordic representative into the PRI association board, the organisation's decision-making hub, according to Mr Buhl.

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