Responsible Investor

Dow Jones Indexes has joined with Dharma Investments, the private investment firm, to launch a benchmark of companies selected according to the value systems and principles of Dharmic religions, especially Hinduism and Buddhism. To be included in the Dow Jones Dharma Indexes, stocks must pass a set of industry, environmental, corporate governance and qualitative screens for Dharmic compliance, which includes non-investment in sectors including alcohol, adult entertainment, animal testing and genetic modification of agricultural products.
International environmental organizations including Friends of the Earth and WWF have written to Sir Fred Goodwin, chief executive of Royal Bank of Scotland (RBS), demanding the bank recalls a controversial $1bn loan by ABN AMRO to Russian energy giant Gazprom. The money was used by Gazprom to purchase a controlling share of the Sakhalin II oil and gas project in Russia. RBS lead a consortium of banks that purchased ABN AMRO in 2007. The environmental groups say Sakhalin II has caused severe environmental problems and violates the Equator Principles, the banking project finance principles, to which RBS has signed.
Canadian investment managers are increasingly seeking to tie executive compensation to performance because of concerns about ‘pay for failure’ by pushing shareholder resolutions on the issue, according to Canada’s Shareholders Association for Research and Education (SHARE). Peter Chapman, executive director at SHARE, said: “Executive compensation was the big issue last year. Continuing shareholder support helped drive a number of resolutions aimed at curbing excessive pay packages for executives. Our survey showed strong support for these proposals.” However, SHARE’s 2007 Key Proxy Vote Survey, revealed that a majority of investment management firms surveyed (67%) indicate they are given complete discretion for proxy votes by their pension fund clients.

It said many pension funds still turn over their proxy votes to investment firms without providing guidance on how those votes should be exercised.
Plans to cut greenhouse gas emissions, due to be unveiled by the European Commission this week, risk working against the environment and could destroy the competitiveness of European companies, according to the European Roundtable of Industrialists (ERT), a group of 50 of Europe’s biggest industrial companies. In a letter to Gunter Verheugen, European Union commissioner for enterprise and industry, Jeroen van der Veer, chief executive of Royal Dutch Shell and chairman of the ERT’s energy and ­climate change working group, said the EU’s plans to introduce an auction system for carbon certificates to replace the current free allocation of permits on a country-by-country basis could encourage undesirable protectionist measures, such as import taxes on goods from countries without similar schemes. The letter said the move could also damage the competitiveness of European industry by imposing costs that cannot be passed on to consumers, in turn, threatening investment in carbon capture and other environmental initiatives.
Five of the eight leading US presidential candidates support a federal cap-and-trade system to reduce greenhouse gas emissions, according to the US Chamber of Commerce. The US Congress is debating a series of energy options that will form the basis of future US policy on climate change and clean energy markets, including the introduction of a cap-and-trade emissions system.
The UN will this week publish a draft industry manual aimed at simplifying the market for developing country project credits that can be used for emissions trading under the Kyoto agreement. The manual aims to make the process more predictable and with swifter project registration and carbon credit issuance.

Not a member? Register here »