The US Private Equity Council (PEC) has published their Guidelines for Responsible Investment, which have been welcomed by the Universities Superannuation Scheme (USS), the UK's second largest pension fund.

Environmental, health, safety, labour and governance issues have been called for consideration in the Guidelines, as well as a call for openness with stakeholders and respect for human rights in the investment processes used by private equity firms.

Some of the world's largest and best-known private equity firms have membership with the PEC, which has also worked with other large institutional investors including pension funds from around the globe, under the patronage of the Principles of Responsible Investment (PRI).

"As a long-term and responsible investor trying to implement RI policies across all asset classes, we are pleased to see some of the highest profile US based PE managers signing up to a detailed set of guidelines in this area," said USS chief investment officer, Peter Moon.

David Russell, co-head of responsible investment at USS, added: "Working together, pension funds and private equity firms have a responsibility to address environmental, social and governance issues in our investments. USS will continue to work with PEC, its members, and other private equity firms to ensure that the risks and opportunities that these issues present are addressed."

The guidelines also ask PEC member firms to employ governance structures that provide for appropriate levels of financial oversight, to provide timely information to limited partners on issues associated with the guidelines, and to encourage portfolio companies to pursue these guidelines in a manner consistent with their fiduciary responsibilities.

- Pensions Age February 2009

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