Responsible Investor

pressure on Japanese companies by writing to nearly 200 to outline its stance on issues such as board diversity, independence of non-executive directors and poison-pill defences. Japanese companies are regularly criticised by foreign investors over corporate governance standards.
In November, 2007, the £20bn (€27bn) pension fund manager, which looks after the assets of the £17.8bn Railways Pension Scheme and several smaller pension funds, re-appointed Governance for Owners, the engagement specialist, to oversee governance in its £690m Japanese equity portfolio.
The European Commission has given a significant boost to investment in green industries by naming sustainable construction, recycling, bio-based products and renewable energies, as four of six new sectors to benefit from its new Lead Market Initiative (LMI). The commission said the initiative would aim to remove planning and certification barriers hampering the development of the renewable energy market, promote next-generation recycling processes and cut administrative burdens for sustainable construction firms. The commission claimed the measures would help to more than double the size of the six selected industries – the other two sectors being e-health and protective textiles – estimating that they could generate more than €300bn and more than three million jobs for the EU by 2020.
The EC could also radically toughen up its emissions trading scheme (ETS), according to a draft proposal seen by research firm Point Carbon. According to the group, a leaked draft of proposals scheduled for release

next week when the Commission publishes its climate change plans for the period from 2013 to 2020, proposes a major tightening of emission caps for companies. It also proposes a huge increase in the number of auctioned carbon credits with the goal of reducing the emissions cap by 21 per cent on 2005 levels by 2020. It said the report also suggests ending the free allocation of carbon allowances to power companies from 2013 and increasing the proportion of auctioned allowances in order to end all free allocations by 2020. The EC plans to published finalised draft proposals on a series of energy and climate-related policies on January 23.
UBS has launched the Greenhouse Index, a tradable investment benchmark mixing weather and emissions asset classes with the aim of giving investors exposure to greenhouse gas emissions and their impact on the weather. Weather exposure is derived from Heating Degree Day (HDD] and Cooling Degree Day (CDD) futures contracts traded on the Chicago Mercantile Exchange (CME). Emissions exposure is provided by carbon credits associated with the EU Emission Trading Scheme traded on the European Climate Exchange (ECX) and the Kyoto Clean Development Mechanism traded on Nord Pool. 
The index governance committee will meet annually to determine its composition and weighting. Ilija Murisic, executive director, hybrid derivatives trading at UBS, said: “Companies that have exposure to emission markets are also potentially exposed to significant weather risk. Despite the explosive growth of their market, weather derivatives and carbon emission futures remain predominantly a hedging instrument for

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