Code for Responsible Investing in SA (CRISA)
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Committee on Responsible Investing by Institutional Investors in South Africa 2011

The Code for Responsible Investing in South Africa provides in Principle 3 that "where appropriate, institutional investors should consider a collaborative approach to promote acceptance and implementation of the principles of this Code and other codes and standards applicable to institutional investors”. This correlates with the UN-backed Principles for Responsible Investment (PRI) launched in March 2006. These principles encourage collaborative engagement to better incorporate environmental, social and governance issues in decision-making and ownership practices. There are similar recommendations for engagement, stakeholder consulting, working jointly, collective action, etc. in the King Report on Governance for South Africa, 2009; the International Corporate Governance Network (ICGN) - Statement of Principles on Institutional Shareholder Responsibilities (July 2007); The UK Stewardship Code (July 2010).

Due to the danger of "acting on concert” a guidance document was drafted by the PRI South Africa Network Engagement Working Group in South Africa to provide clarity on the regulatory framework that govern collaborative engagement. The guidance was reviewed by the Executive Director of the Takeover Regulation Panel.

Ignore Code on responsible investing at your own peril, institutional investors told


The Code for Responsible Investing in South Africa (CRISA) was launched in Johannesburg today. This makes South Africa only the second country next to the UK to formally encourage institutional investors to integrate into their investment decisions sustainability issues such as environmental, social and governance (ESG).

John Oliphant, chairman of the stakeholder committee that drafted the Code last year, says CRISA aims to provide the investor community with the guidance needed to give effect to the King Report on Corporate Governance South Africa (King III) as well as the United Nations-backed Principles for Responsible Investment (PRI) initiative. Both require institutional investors to take ESG issues seriously.

"The Code is the next step in ensuring that institutional investors actually implement policies that guide their day to day actions when it comes to responsible investing,” says Oliphant.


Endorsing the Code


CRISA has been endorsed by the Institute of Directors in Southern Africa (IoDSA), the Principal Officers Association (POA), and the Association for Savings and Investment South Africa (ASISA). The principles of CRISA are supported by the Financial Services Board (FSB) and the Johannesburg Stock Exchange (JSE).

The PRI initiative has also expressed its support for the Code. Dr Wolfgang Engshuber, chairman of the PRI, says: "We strongly support the CRISA Code. It is important that pension funds and investment managers operating in South Africa understand clearly their responsibilities and invest for the long-term. The successful adoption of this Code sends a clear signal to other regulatory agencies around the world that they can - and should - play an important role in encouraging responsible ownership practices.”

CRISA applies to institutional investors such as pension funds and insurance companies as the owners of assets, and their service providers including asset managers and consultants. It encourages institutional investors and service providers to adopt its principles and practice recommendations on an "apply or explain” basis. The effective date for reporting on the application of CRISA is 1 February 2012.


Apply or explain


Oliphant, who is also Head of Investments and Actuarial at the Government Employees Pension Fund (GEPF), points out that responsible investing and corporate governance guidelines in South Africa are largely voluntary.

"The Code aims to put in place the checks and balances needed to make this voluntary framework successful. Together with the King Report, which is also not legislation but rather principles and practices that are adhered to on an ‘apply or explain' basis, the new Code will seek to encourage best practice conduct by shareholders and companies.”

Oliphant is confident that the Code will be adopted by institutional investors, even if it is voluntary. "CRISA will empower the beneficiaries of investments made by institutional investors like pension funds to ask the right questions and to select responsible custodians for their investments. And why would a pension fund in turn want to place money with an investment manager who has not adopted and applied the policies of the Code?”

He adds that since the revised Regulation 28 of the Pension Funds Act requires pension funds to give appropriate consideration to any factor which may materially affect the sustainable long-term performance of a fund's assets, including ESG, institutional investors would be foolish to ignore the Code.

Oliphant warns that if the voluntary Code is not taken seriously by institutional investors, this could result in intervention by the policymaker.


Fiduciary duties


Oliphant stresses that the world is currently facing serious sustainability challenges, ranging from the devastating effects of the financial crisis to socio-economic challenges and climate change.

"As long-term investors with fiduciary duties, we simply cannot afford to ignore the importance of integrating sustainability issues, including ESG, into long-term investment strategies. As institutional investors we have the ability to influence and encourage the companies in which we invests to apply sound governance principles and to care for the environment in which they operate.”


CRISA Practice Notes


  to access the CRISA Practice Notes

The Code can be downloaded above or from or