Responsible Investor

Catherine Howarth, is to become the chief executive of FairPensions, the UK campaign for responsible investment. She takes up the role on 28th July. Howarth, currently director of West London Citizens, is a pension fund trustee and a former senior researcher at the New Policy Institute. She replaces Alex van der Velden who joined Dutch pension fund, PGGM, as head of sustainable investment strategies.
Emerging markets fund managers are to be rated based on the incorporation of environmental, social and governance factors (ESG) into their investment decisions as part of a new research initiative commissioned by the International Finance Corporation (IFC), the private sector branch of the World Bank Group. The IFC has appointed Mercer, the investment consultant to conduct a study of 50 managers based in the emerging markets of China, India, South Korea and Brazil and a survey of over 200 managers globally who invest in emerging markets. Tim Gardener, global business leader of Mercer’s investment consulting business said: “As demand for investment in emerging markets has grown, so too has the need for a better understanding of the environmental, social and governance forces at play in these markets and their impact on performance,” he said. The study’s findings will be made public later this year.
University College London has become the latest in a string of UK education institutions to consider switching investments into ethical trusts following student protests, reports the Times Higher Educations Supplement. It reported UCL’s provost, Malcolm Grant, saying the university was “taking on board student concerns”. The paper reported that in 2007, the University of St Andrews had introduced a similar policy, while Cambridge universities, New Hall and St Catharine’s College, both sold investments in companies that do business with the Sudanese Government, and Pembroke College sold arms company stocks after student pressure. A 2006 report from Campaign Against Arms Trade showed that UCL had £1.5m in arms shares at the time.

Less than a third of fund managers running over $12 trillion in assets – including over half of the world’s leading 20 houses – provide structured training for their portfolio managers and key investment staff on environmental, social and governance issues (ESG), according to a report by RImetrics, a UK-based company which measures asset management implementation of SRI issues.
The survey, which examined 28 fund managers, said many were not integrating ESG knowledge and research into their investment process, despite improvements in their understanding of the issues. More than 100 fund managers have signed up to the UN Principles for Responsible Investment, which encourage managers to carry out such integration. RImetrics said fund managers also rarely consulted with their clients on the development of responsible investment strategies. Bill McClory, a trustee of the BT Pension Fund said, “This report provides a valuable insight into managers’ RI practices and behaviours which should stimulate trustees to ask questions of their current managers and to seek out those managers with better than average practices. This is a wakeup call to those managers who do not demonstrate good practice.”
info@rimetrics.com
European listed property companies could significantly improve corporate governance practices, according to a study released by EPRA – The European Public Real Estate Association. The report said a key determinant of corporate governance quality was the link between managerial compensation and performance and/or stock value. Erasmo Giambola, Assistant Professor in the Finance Group of the University of Amsterdam and the author of the EPRA report said: “This is one factor where we have really consistent evidence that if you don’t link compensation and performance, then you produce poor results for shareholders. It is strikingly clear in one European market where this link is poor to non-existent and company performance is also weak.”

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