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UNI Global Union is encouraging pension funds, their trustees and fund managers to support labour rights as an integral measure of responsible investment. UNI sees this as especially important when considering investment in private equity, who to date will not commit to a labour code for those workers employed in their portfolio companies.



As part of the Global Unions statement on ‘responsible approaches to the stewardship of workers capital’, released late last year, UNI calls for respect for internationally recognised human rights and labour standards, when making investment decisions for workers capital. UNI's plea for making a responsible investment decision is two dimensional in nature, when referring to private equity investment. Firstly pension funds should encourage private equity firms to adopt international labour standards and act responsibly towards employees as an employer, which is in the interest of the company's long term sustainability and profitability. The second dimension is that the pension fund requires private equity firms to be forthcoming and transparent with their operational plans and financing arrangements, so that the pension fund can clearly make decisions in the interest of returning dividends to workers capital. UNI supports the UN Principles for Responsible Investment as a sound framework for investors and trustees to begin to make investment decisions based on environmental, governance and social principles.



As the private equity mega deals of the past remain scarce, investment on a smaller scale remains constant with these firms. Pension funds are increasingly key investor targets for private equity fund raising. UNI is soon to release a report urging pension funds, trustees and their investment managers to proceed with caution when considering private equity investments. At the heart of the report by UNI is a message for pension fund trustees to apply principles of responsible investment, focusing on labour standards as an integral part of the investment decision. The report is due out in July.