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Page 2 - RI round-up October 5
Flintshire County Council, administrator of the Clywd Pension Fund in the UK, with an 8% stake in the fund. Shares in the Ludgate fund, which is quoted on AIM and focuses exclusively on the environmental/cleantech sector, closed at 92p on June 30, a drop of 19.7% over the year. Despite the losses, total return to shareholders for the year exceeded the FTSE AIM All-share index by 23%. LEF continued to grow in size over the year, achieving a £15m increase in net asset value to reach £50.4m. The directors recommended a dividend of 1.5p per share. The fund said it would modify its investment policies to become more active and engage more closely with investee firms to boost returns.
Financial institutions in emerging markets “have a long way to go” in terms of climate change governance, according to a new report for DEG, the German development finance institution. Despite increased awareness of climate change issues and the growing investment opportunities associated with renewable energy, energy efficiency and climate adaptation projects, the 43-page study found that banks in Asian, Latin American and other emerging markets were lagging their peers in the developed markets. The report said, “it is clear that [financial institutions] in emerging markets have a long way to go in implementing strong climate change governance practices”. The study was the first systemic investigation of how emerging market banks are addressing climate risk with DEG seeking to set a baseline for responses. Sixty-four banks in Eastern Europe, Central Asia, Africa, Latin America and South Asia were polled.
Environmental, social and governance (ESG) issues are increasingly considered part of pension fund fiduciary duty, according to a survey of pension funds. Almost three quarters (70% approximately) of 42 fund respondents to a poll by IPE.com said it was part of a trustees’ fiduciary duty to include ESG in their decision-making process and during manager selection processes. Only a quarter disagreed. But more than 51% of respondents were unsure as to whether ESG investments would help generate a higher return. While 39% thought that the integration of ESG factors into pension fund investing would benefit from the financial crisis, 31% disagreed. However, 67.5% of the respondents said they had not been paying any more attention to ESG since the start of the financial crisis. Less than a quarter of respondents said they applied ESG criteria to their entire portfolio. Around 27% said they had no ESG strategy, while the majority – around 48.5% – applied an ESG strategy to between 2% and 95% of their portfolio.
More shareholders are voting against director nominees, according to data from US advisory firm Proxy Governance, which found “a significant increase” in the number of opposition votes to director nominations in the first eight months of 2009. Proxy Governance said: “Although the vast majority of director nominees continue to be elected with little opposition, for companies with director votes available through August 2009, 9.8% of unopposed director nominees had at least 20% of shares voted against them or withheld, up from 5.5% in 2008.” Senior managing director Scott Fenn, said: “While declines in stock prices and the
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