Pension Note No. 85 

This pension note addresses the importance of responsible investment, understood as that which considers Environmental, Social and Corporate Governance (ESG) factors in investment processes. Secondly, a review is made of the general state of progress that has been made in the region around this topic, identifying the main trends and driving forces around the financial system in general and the individual savings pension system in particular. Thirdly, a brief review is made of the Latin American pension systems with the greatest progress in the integration of ESG factors, alluding to the main milestones and regulations that have occurred over time. Finally, the note concludes with some recommendations to advance the development of ESG and climate change factors in the region’s pension funds.

I. What is meant by responsible investment?

Responsible investment consists of creating economic value through environmental care (E), social factors (S) and good corporate governance (G). By integrating these criteria (ESG) into the investment process, the aim is to promote better decision-making, achieving a better risk-return
ratio.

Regarding the “Environmental” factor, the approach generally considers the non-pollution of air and water, the fight against climate change, the reduction of carbon dioxide and greenhouse gas emissions, energy efficiency, respect for biodiversity, and the use of renewable energy, among others.

At the “Social” level, priority is generally given to achieving or maintaining social stability through issues related to human health, education, human rights, and workers’ rights, among others.

Pension Note No. 85