Stockholm (NordSIP) – One of the main tenets of sustainable investing is that transparency and accountability lead to better investment outcomes. In this spirit, the Global Pension Transparency Benchmark provides a global standard for pension disclosure. The GPTB ranks 15 countries on public disclosures of key value generation elements for the five largest pension fund organisations within each country.
The GPTB, a collaboration between Top1000funds.com and CEM Benchmarking, focuses on the transparency and quality of public disclosures with quality relating to the completeness, clarity, information value and comparability of disclosures. The overall country benchmark scores look at four factors: governance and organisation; performance; costs; and responsible investing, which are measured by assessing hundreds of underlying components.
According to this year’s edition, average country scores ranged from 43 to 84 in 2022. The overall average performance score was 62, a slight decline from 64 last year and the second highest scoring factor after governance. The average country cost factor score was 48, unchanged from last year’s review, with individual scores ranging from 10 to 77. The average country score for responsible investing was 49 out of 100 up from 42 in last year’s review, marking the biggest relative improvement among any of the four factors.
According to the latest edition of the GPTB, two Nordic Pension fund providers, AP4 and Varma, were the global benchmark leader in the world. Other high-performing Nordic pension providers include Finland’s ELO and Ilmarinen which ranked third. Sweden’s Alecta ranked 7th followed by Norway’ssovereign wealth fund (the Government Pension Fund Global) (9th), Sweden’s AP3 (12th), Norway’s KLP (12th), Denmark’s ATP (16th) and PFA (19th), Sweden’s AMF (22nd), PensionDanmark (24th) and AP7 (25th).
Considering each of the four factors, three countries led the way. At the country level, GPTB‘s disclosures’ ranking found that Canada performed outstandingly for governance. The Netherlands led the way for cost and for responsible investing, while the USA topped the charts for performance.
“It was apparent from the reviews that many funds are actively taking steps to improve communications on responsible investing to stakeholders. In particular, many funds are expanding their disclosures to include quantifiable measures and progress towards climate related targets,” CEM Benchmarking’s Michael Reid says.