Responsible Investor

RI round up June 22

RI’s regular round-up of the most important RI news stories.

WHEB Ventures, the London-based clean tech venture capital firm has launched a listed companies offshoot, WHEB Asset Management. The new company has also launched its first fund, the IM WHEB Sustainability Fund, focusing on water, climate change and demographic opportunities, managed by the experienced SRI team of Clare Brook, former director of SRI at Morley, and Nicola Donnelly, former director at UBS Wealth Management.
FTSE, the index group has launched a new classification system for environmental companies and added seven new equity indices in its Environmental Opportunities series the UK, US, Japan, Europe and Asia Pacific based on the methodology. FTSE said the system, developed in tandem with Impax, the green fund manager, allowed companies to be classified by sector and sub sector according to the environmental products and services they provide. This, it said allowed companies who provide environmental products, activities and services, to be identified more easily and compared between peers on a global, regional and pan-regional basis. It said it would also be used for the launch of sector based investment products such as ETFs, mutual funds and derivatives.
Legal & General, one of the UK’s biggest fund managers, has published a five-point plan to overhaul company practice. The fund manager said that the chairman, senior independent director and heads of committees at listed companies should face re-election each year and that eventually all directors should be approved by shareholders each year. The plan is part of the group’s submission to the Walker inquiry into bank governance to be published next month.
The OECD has said shareholders need to be more proactive as owners in order to improve corporate governance globally. Mats Isaksson, head of corporate affairs at the OECD, said many shareholders “took their eye off the ball when times were good”. Isaksson said: “A firm’s rising price is not necessarily a sign of good governance. History tells us that it could actually be the opposite.” Isaksson said company pay structures should not just look at high-profile chief executives and senior

staff but demonstrate that the overall corporate culture is aimed at long-term sustainability with limits to short-termism in pay and bonuses.
Nasdaq OMX Group has allied with CRD Analytics, a New York-based sustainability investment analysis firm, to launch the Global Sustainability 50 Index. The index tracks the performance of leading companies in sustainability performance reporting in line with the Global Reporting Initiative’s G2/G3 guidelines whereby companies must report at least 20% of their core environmental performance indicators, 20% of social indicators and 70% of financial indicators.
Markit, the London-based financial information services company is planning to launch one global and three regional investment indices in the UK, European and the US based on data from the Carbon Disclosure Leadership Index (CDLI), which ranks responses to the Carbon Disclosure Project such as greenhouse gas emissions data and climate risks and opportunity policies.
EIRIS, the Centre for Australian Ethical Research (CAER) and Survival International are backing a UN PRI programme to sensitise investors and their investee companies to the rights of indigenous peoples around the world. A report by EIRIS said it had identified 250 companies with a total market value of £1.7 trillion with risk to indigenous rights issues, of which 17% were deemed to be high risk, in a n area that generates significant media interest. It also found that few companies report on indigenous rights issues. Stephen Corry, Director at Survival International said ‘Investors must use their considerable power to persuade companies to respect and protect the rights of indigenous peoples, otherwise they risk being charged with complicity in abuses they bankroll. As EIRIS has shown, this vital issue is chronically under-reported by companies. The United Nations Declaration on the Rights of Indigenous Peoples and ILO convention 169 should be used as benchmarks for the development of company policies on indigenous rights. Companies that fail to gain the free, prior informed consent of indigenous communities affected by their projects are in flagrant breach of international law.’

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