The Government Institutions Pension Fund (GIPF) is considering investment opportunities in the Environmental, Social, and Governance (ESG) areas, with its eyes set on potential investments in SDG Namibia One and other green climate fund managers.
This comes as the Fund revealed on Thursday that it will be working exclusively with Fund Managers whose policies and compliance align with ESG principles for such investments, a continuation of GIPF’s ongoing efforts in this area, having already invested in renewable energy totalling 95.75 Megawatts.
“With an eye on industry development within the region and particularly in Namibia, the Fund has been keenly observing the emergence of green or climate awareness investment opportunities. The GIPF board is cognisant of these opportunities and will, in due course, evaluate its interest in responsibly participating in these climate award funds such as the SDG One Namibia and the Green Climate Fund, in line with our Investment Policy Statement,” GIPF Board of Trustee Chairperson Penda Ithindi said.
SDG Namibia One is a blended financing vehicle for green hydrogen investment in Namibia and aims to raise funds from local institutional investors and global investors to develop Namibian green hydrogen projects and related infrastructure. The Fund is managed by Nam-H2 Fund Managers, a collaboration between the Environmental Investment Fund of Namibia, Climate Fund Managers, and Invest International from the Netherlands.
The GIPF position was disclosed at the GIPF’s two-day Responsible Investment Symposium (RIS). The symposium, dedicated to challenging thinking, broadening horizons, and engaging in honest debate about the relevance and practical impacts of the Responsible Investment and ESG landscape, attracted nearly 200 participants, including 20 speakers from the United Kingdom, South Africa, United States of America, and Senegal.
Under the ESG strategic theme, Ithindi mentioned that GIPF developed a Responsible Investment and Active Ownership Policy in 2017. This policy is periodically revised to ensure its relevance and alignment with recent market developments, global best practices, and local context.
“We require all our fund managers to comply with GIPF’s Responsible Investment and Active Ownership Policy, integrate ESG into their investment processes, and report to us on a quarterly basis. The GIPF Board, through the Investment Committee, tracks these milestones and reports on a quarterly basis. We encourage all fund managers to report on their activities on a quarterly or annual basis to ensure compliance with, and achievement of, the policy objectives. Fund managers with a strong ESG and responsible investment record will be highly rated,” Ithindi stated.
Additionally, he noted that the Board has observed that the transformation agenda is not yet fully entrenched through the Fund’s local investments. As a result, they are considering adopting a transformation policy in response to GIPF’s Investment Policy Statement requirement and Responsible Investment and Active Ownership policy.
“This policy will solidify our position in ensuring that Fund Managers increasingly implement the developmental and transformation agenda. As a responsible investor, the Fund invests in both private and public markets. GIPF’s investments are guided by our Investment Policy anchored on a liability-driven and asset-matching approach with return expectations of 5% above inflation,” he added.
Furthermore, Ithindi said the Fund has made significant strides in coordinating responsible practices by applying the United Nations Principles for Responsible Investing’s (UNPRI) six principles to integrate the ESG commitments and action points into its investment process.
Adding that “in accordance with these six UNPRI principles, the Fund commits to incorporate ESG issues into investment analysis and decision-making processes, and also, as an active owner, incorporate ESG commitments into our ownership policies and practices”.
The UNPRI further seeks appropriate disclosure on ESG issues by the Fund Managers and portfolio companies in which GIPF invests, promoting acceptance and implementation of the principles within the investment industry. It also includes working together with fund managers to enhance effectiveness in implementing the principles, and the continuous report on implementation progress.
Ithindi also revealed that the GIPF has witnessed an exponential growth of its asset base from levels below N$1 billion in 1990 to the current level of about N$165.5 billion.
“This is approximately 61.6% of the size of Namibia’s economy of which about 51%, some N$84.4 billion, is invested locally,” he said.
