Responsible Investor

RI round-up Feb 21, 2008

RI’s bite-sized round-up of the week’s reponsible investment news.

The New Zealand government has come under fire over investments by the country’s $13.8bn Superannuation Fund in companies linked to the manufacture of cluster bombs during the country’s hosting of a five-day conference to explore an international treaty on cluster munitions, attended by delegates from 122 countries. New Zealand Green Party co-leader Russel Norman, claimed the fund had increased its investment in cluster-bomb makers. He said investments in Lockheed Martin, the US group, had recently grown from $15.8 million to $21.9m, and a stake in Raytheon, another US group, from $1.5m to $2.3m. Both companies are on the banned list of funds including the Norwegian Government Pension Fund for their links to cluster bombs. Other firms on New Zealand Super’s investment list linked to the making of cluster bombs include Thales and EADS in France and Northrop Grumman in the US. Responding to the allegations, Phil Goff, New Zealand’s Disarmament and Arms Control Minister, said: “In fact, the Super Fund has quite publicly withdrawn investments from a number of companies which were very closely associated with the production of cluster munitions. There is no inconsistency in the Government position.”
Ethos, the Geneva-based foundation which looks after CHF2.3bn (€1.4bn) in assets run on a socially responsible basis on behalf of Swiss pension funds, says responses by UBS, the Swiss banking group, to its call for an independent audit on $13.7bn (€9.6bn) losses as a result of the US sub-prime mortgage crisis “cannot be

considered satisfactory.” The foundation has renewed calls for a special audit of the bank ahead of UBS’ extraordinary general meeting on February 27 and is urging shareholder support for the proposal. Ethos said that despite the bank’s explanations it still had concerns over the separation of risk management and risk control functions. It said it was also concerned to ensure that the remuneration of risk control employees was free of elements that could generate conflicts of interest.
It said UBS’ responses did not allow shareholders to determine whether its risk management and risk control systems had failed or not in the lead up to the losses. The foundation said: “Clear answers are necessary for shareholders to exercise their voting rights knowledgeably.”
The €2.8bn Dutch industry-wide PNO media pension fund has hired Hermes Equity Ownership Services as external SRI adviser after implementing a new SRI policy, reports ipe.com. Under the new policy, PNO will publish all listed and unlisted equity holdings as well as its stock exclusion list, which now includes eleven companies involved in the production of arms and nine which make or sell products containing fur. The PNO member scheme of broadcasting organisation Llink threatened to leave the fund last year after research showed PNO invested in companies involved in arms trade, major pollution and violation of human rights. In a statement, Llink said it welcomed the changes: “Because PNO will from now on invest the pension money of the broadcasting workers in a responsible way, it is giving

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