Saturday, 12 April 2008

Tories getting smarter?

Have a look at pages 12 to 14 of this Conservative Party policy document that appeared last month. It promotes the revitalisation of the HSE's CHaSPI (an index for measuring companies' health and safety performance) and it recommends that the disclosure amendment to the Pensions Act requiring pension funds to disclose their policy on SRI and voting should be reviewed, and strengthened:

This review would be conducted with a view to further strengthening the reform by incorporating an annual reporting requirement for Pension Schemes detailing what action has been taken in support of the SIP.

The usual caveats apply - this is only a policy document, it might be just hot air - but it does raise the prospect of the Tories actually looking more actively supportive of responsible investment and shareholder engagement than Labour. In addition I can't believe that the Tories got there by themselves, they must have been talking to some people in the SRI world (there's only a handful of people in the investor community who have properly thought about CHaSPI in my opinion). That's not a bad thing in itself of course, and I really wish we could get CHaSPI properly up and running so any help must be positive even if it comes from the Dark Side.

But it does signify that the SRI community thinks the Tories are worth talking to/assisting with policy development. I'm afraid it may be another sign of which way the wind is blowing.


Ian Manborde said...

Hi Tom,

Isn't it an historically established exercise that opposition parties (and even sitting governments) offer all manner of sweeteners in pre-government policy documents only then to water down or drop altogether their implementation once elected?

Isn't it also the case that the Tories are already looking better than New Labour on issues around responsible investment and shareholder engagement. Their promises to explore the extention of co-operativism across employment, schools health etc. are a good example of this.

Why is it, do you think, odd that the Tories are able to engage with SRI professionals, and vice versa. As an example of this new found philosophical flexibility that can be seen here it was only last year that the TUC in the guise of unionlearn had a stall at the Conservative party conference.

The signs therefore of the way in which the wind is blowing may be worse than your predict; what if they are blowing in both directions?

I'd welcome your thoughts.


Tom P said...

Hi Ian

I suppose that for me it's unusual to see the Tories seeming to set the agenda in this area - at least in terms of some interesting policy ideas - as my experience has been that they have always been very resistant to SRI. There have been exceptions. John Gummer was involved with an SRI fund years back. But in general both on the policy level and on a practical level (ie Tory councilors involved with local govt pension funds) they have tended to be a block on progress. Only a few years back the Tories played a significant role in trying to block moves to give the public information on ghow investment managers exercise their voting rights at AGMS for example.

Therefore their apparently now more enlightened approach seems to be a very recent development. Notably one of the MPs involved in the policy document I posted about was also involved in trying to block fund manager transparency. So I am a bit sceptical about the real extent of change in this area.

That said I think you may be right that the wind is blowing in both directions now. I know more than a few SRI people who have totally given up on Labour, in part because of issue like Iraq, in part because of things that affect our bit of the world (like the last minute scrapping of the operating and Financial Review). I think Cameron has been successful in his 'decontamination' process to the exent that the liberal-ish/green-ish type of people that work in SRI may now regard his party as a vehicle of further progess.

Obviously I think they are wrong!


Ian Manborde said...

Hi Tom,

Many thanks for your response.

Granted it's unusual to see the Tories in this area, but surely their agenda now is what New Labour's was prior to 1997; steal the ground where the Tory's predominate?

I tend to agree with you in that the SRI agenda isn't traditionally indicative of Conservatism at its best.

Surely you'd agree however that there are many variants of SRI that the Tories could easily cosy up to with very little troubling of traditional ideology?



Tom P said...

Yes you're right, in a way you would have thought that SRI might appeal to the Tories as it can be pitched (as in the policy document) as an alternative to regulation. Active shareholders can be a force for ensuring that companies adhere to decent standards, rather than the state compelling them behave a certain way.

Given that the SRI world is, in my opinion, much more 'Green' than 'Red' (labour issues are rarely afforded the same amount of consideration as environmental ones) you can also see the potential fit with Camrton's pitch to voters.