Responsible Investor

Research, the investment analysis company and Trucost, the environmental research firm, reports Financial News. Oil and gas stocks which polluted the least outperformed by 0.9%.Robert Schwob, chief executive of Style Research, said he believed that evidence would lead to a change in behaviour by consultants and pension scheme trustees in the selection of their mainstream portfolio constituents.
The $65bn California State Teachers Retirement System (CalSTRS) the second largest US pension fund, is debating whether to lift a ban on tobacco investments. Both CalSTRS and CalPERS, the Californian fund for state employees, dropped tobacco company investments in 2000 as a result of lawsuits aimed at the industry. Tobacco stocks represent just short of 2% of the Russell 3000, the fund’s benchmark. Separately, CalPERS expects to search for a group of commodities, infrastructure and forestry consultants by the end of June, with hires planned for September. CalPERS targets 1.5% each of its total portfolio in commodities and infrastructure, and 1% in forestry.
Triodos Renewables Energy Fund, the UK clean energy company, has raised £5m in investment from retail and institutional investors in the first month of a new share issue. The fund has returned 22.9% in the past three years or an average of over 7% per year. The current share issue aims to raise £8.5m, net of costs, which will be invested directly in renewable energy projects and companies.
Lord Stern, author of the UK government-backed Stern report on climate change, is to launch the world’s first credit rating system for carbon offset projects in the developing world this month.

The system will award debt-style ‘AAA’ ratings for the best and most expensive projects – and ‘junk’ ratings for the riskiest. The aim is to help investors wanting to buy carbon credits from projects to judge which ones to invest in and which to avoid. According to the World Bank, trading in UN-approved carbon offset credits (or CERs). which are used to meet emissions targets under the Kyoto protocol, totalled $13bn (around £6.6bn) last year.
A lack of standardised and reliable industry reporting on existing CO2 emissions is limiting the ability of investors to assess vehicle manufacturers’ exposure to carbon risk, according to a report by Trucost, the environmental research organisation. The report, titled Vehicle Manufacturers: Carbon Risk Exposure, analyses the effect on the sector of proposed EU legislation that from 2012, manufacturers that fail to reach a new 130g CO2/km target will be obliged to pay an “excess emissions premium” for every year of non-compliance. Trucost calculates that if all manufacturers missed the targets, it result in €10bn worth of extra costs for the sector.
Innovest, the sustainability research house, has introduced a new Sustainability Value at Risk analytic model to rank banks by the ESG performance of the companies they finance. According to Innovest, the top sustainable investment banks have beaten the bottom banks by 11% over three years, and 4% over the past 12 months. Innovest rated Bear Stearns below investment grade, or “BB” nine months before it collapsed and forecasted that the subprime sector would collapse in October of 2006.

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