General Assembly Mandate:
Pursuant to General Assembly Resolutions 31/197 in 1976 and 32/73 B in 1977, the General Assembly requests the Secretary-General to redouble his efforts in consultation with the Investments Committee, to ensure that, subject to careful observance of the requirements of safety, profitability, liquidity and convertibility, and in strict conformity with the Regulations of the UNJSPF, a larger proportion of the investment of the resources of the Fund is made in developing countries.
Sustainable Investment Approach:
The Sustainability practices of the Office of Investment Management (OIM) grow out of our belief that institutional investors need to incorporate a holistic approach to sustainability into their investment beliefs, strategy, process, systems, data and decision-making within a global economy.
The UNJSPF’s Investment Policy Statement (IPS) addresses environmental, social and governance (ESG) concerns by explicitly prohibiting investments in the tobacco and armaments sectors, while it does not mandate divestment in other areas. The Fund acknowledges its responsibility to society as part of a global organization committed to social progress by being a founding signatory to the Principles for Responsible Investment (PRI). The fund is also associated with the United Nations Global Compact (UNGC) and the UN Environment Program (UNEP) Finance Initiative.
By deploying an active voting and engagement policy which supports UN initiatives and communities, the UNJSPF can more effectively impact positive and sustainable change consistent with our mission. The Fund believes in an effective dialogue with company management in order to affect corporate behavior and advocate for better outcomes. This encouragement and engagement policy does not mean that the Fund may never reach the conclusion to divest, but such decisions would be based on a comprehensive analysis. The engagement can take time and presents unique challenges, but OIM believes that it is more effective in the long-term and results in greater internal impact.
Tobacco & Armanents Restrictions:
Investments in companies that derive any revenue from the production of tobacco and that primarily deal with manufacturing and distribution of tobacco and tobacco related products are prohibited.
Investments in armaments or other military equipments: The Fund shall not invest in securities of companies that derive any revenue from the production of military weapons, weapons systems or weapons of mass destruction, including nuclear, chemical or biological weapons, or derive more than 10 per cent of their revenue from the production of customized components for purposes of the production of military weapons, weapons systems or weapons of mass destruction.
Thermal Coal Restriction Exclusion:
OIM will divest from investments in publicly traded companies in the coal energy sector by 31 December 2020. Additionally, OIM shall not make any new investments in the coal energy sector across all asset classes. Further policy details will be announced in 2020.
Coal as a source of energy is becoming less economically viable, posing a financial risk to our portfolio, with the costs of renewable sources of energy predicted to undercut commissioned coal almost everywhere by 20301. Phasing out of coal is a primary driver in the effort to support a global energy system scenario consistent with the 2015 Paris Agreement drafted by the parties to the United Nations Framework Convention on Climate Change (UNFCCC). This action will contribute to the attainment of the 2015 United Nations Sustainable Development Goals (SDGs).