CRISA clarifies responsible investment

This is an unedited statement issued by CRISA:

The Committee responsible for the drafting of the Code for Responsible Investing in South Africa (CRISA) has issued a practice note that provides guidance to institutional investors on exactly how to disclose on the application of CRISA.

CRISA was issued last year to promote responsible investment practices and just like the King III Code on Corporate Governance, application of CRISA is voluntary and it works on an ‘apply or explain’ basis.

“Disclosure is vital to a voluntary compliance regime,” says Ansie Ramalho, Chief Executive of the Institute of Directors in Southern Africa (IoDSA), a member of the CRISA Committee and also its Secretariat. “In order for self-regulation by the market to be effective, stakeholders need to be informed about what institutional investors are doing – which also helps to build engagement and constructive relationships between them,” Ramalho adds.

CRISA’s disclosure requirement is also useful to build a growing repository of practices to promote dialogue and learning, as well as to advance transparency and accountability. This is important for enabling stakeholders to call institutional investors and service providers to account, and for them to gain confidence that commitments  are actually carried forward in practice. “Shareholder activism is a force that could be applied for good or bad and just as companies are held to account, institutional investors should also be accountable which is the whole notion that underpins CRISA,” says John Oliphant from the Government Employees Pension Fund (GEPF) and chairman of the CRISA Committee.

Referring to an observed increase in investment managers’ interest on environmental, social and governance (ESG) reported in a recent survey[i] on CRISA , Oliphant says that notwithstanding the progress made by CRISA on raising the validity of ESG considerations in responsible investment decisions, the need for further guidance on the implementation and interpretation of CRISA is recognised.  “I am therefore delighted that the CRISA Committee is able to issue this practice note that deals specifically with transparency by institutional investors on responsible investment policies and how CRISA is applied to enable stakeholders to make informed assessments”, says Oliphant.

How, where, when

The practice note deals with disclosure as three separate elements: disclosure of policies, disclosure of responsible ownership practices and disclosure of CRISA implementation in general. Oliphant explains that the reason for this is that the appropriate platform and timing of disclosure for each of these elements is different, depending on the information requirements of the users.

In all three cases, it is recommended that disclosure takes place on a website or other readily accessible public platforms, where ongoing activity may be tracked. In addition, disclosure in the integrated annual report may be by means of reference to the website disclosure or that which is in the responsible investment report. It may be a standalone report or a section in the integrated annual report or responsible investment report.

Regarding the timing, disclosure is recommended to take place at least annually, or on a continual basis, according to each institutional investor’s requirements.

“We recognise that full implementation of CRISA will only happen over a period of time,” concludes Sunette Mulder from the Association for Savings and Investments in South Africa and deputy chairman of the CRISA Committee. “Therefore, greater levels of disclosure are anticipated from 2013 and beyond.”

The practice note was developed by a working group of the CRISA Committee consisting of Ansie Ramalho from the IoDSA, David Couldridge from Element Investment Managers, Jon Duncan from OMIGSA, Adrian Bertrand from GEPF and Theo Botha, independent shareholder activist.

For detailed guidelines on exactly what CRISA recommends in terms of the three different elements of disclosure, the CRISA disclosure practice note is available for download at and .

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