Responsible Investor

RI round-up April 25

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

Investors including Sweden’s AP1 And AP4 government pensions buffer funds, The Public Service Alliance of Canada (PSAC) Staff Pension Fund and The Ethical Funds Company in Canada, have pushed Canadian mining firm Goldcorp to conduct an independent human rights impact assessment on its operations in Guatemala. Godlcorp has been criticised over the environmental and human rights impacts of its mining operations in the country. The investors, who have been lobbying the company for two years, said they hoped the assessment would become a benchmark for mining companies operating in high-risk countries. As a result of Goldcorp’s announcement, the investors have withdrawn a shareholder resolution submitted to the company in March. The assessment is expected to be completed in the next 8-12 months, with Goldcorp subsequently develop a plan for implementing its recommendations. Helene Regnell, research director of GES Investment Services in Sweden, sustainability advisor to the Swedish AP funds, said: “The outcome of this process could set a precedent for the entire industry and is crucial for Guatemala, since the mining industry has rapidly expanded there. However, after ending 36 years of civil war, the country is extremely vulnerable. Therefore, mining companies and others have a responsibility to make sure their business operations are sustainable over the long-term, and respect the Maya culture.”
CalPERS the $240bn pension fund for Californian public employees, has sharpened its requirements for companies to disclose and act upon climate risks like carbon emissions. The fund said its new environmental guidelines, which reference a 14-point “Corporate Governance Checklist” developed by Ceres, a coalition of investors, environmental groups and investment funds, aimed to protect issues that “could diminish investment returns”.

CalPERS said it would also work with the Investor Network on Climate Risk to survey public equities’ investment managers regarding their ability to evaluate climate risks and opportunities of the companies in which they invest. It said the survey results could help investors identify best practices to incorporate into their review process for current and prospective fund managers. The fund has also adopted new diversity guidelines for ensuring a better mix of sex and race among its corporate board nominees. Russell Read, chief investment officer at CalPERS has also announced he will step down on June 30, 2008, to pursue interests in environmental and clean-tech investing.
The Council of Institutional Investors (CII), the US corporate governance and shareholder lobby group, has elected Dennis Johnson, senior portfolio manager in charge of global corporate governance at CalPERS as its chair. He succeeds Jack Ehnes, CEO of California State Teachers’ Retirement System (CalSTRS). At a recent general meeting, the CII adopted new policies on board succession planning, CEO succession planning and shareowner access to a company’s proxy materials. The latter recommended that companies provide proxy access for a long-term investor or group of long-term investors owning in aggregate at least 3 percent of a company’s voting stock for at least two years to nominate less than a majority of the directors. Click for CII website
German bank KfW, one of Europe’s largest bond issuers, has started to apply sustainability criteria to the management of its own €20bn fixed income securities portfolio, as a result of its membership of the UN Principles for Responsible Investment. Scoris, the German sustainable research company, part of the Siri network, will advise on KfW’s choice of investments and issuers ratings. 


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