Responsible Investor

RI round up: Sept 4

RI’s round-up of the week’s most important responsible investment news.

Taiwan’s $24bn Labour Pension Fund is reportedly looking to adopt a set of SRI principles for its investments, according to Asian Investor magazine. It quoted Lee Ruey-ji, vice chairperson of the fund’s supervisory committee in Taipei, as saying that in the near-term, the fund would start avoiding investment in businesses involved in labour rights violations and begin taking a more active role in shareholder activism in relation to ESG issues in companies in which it holds substantial stakes. The fund is also planning to adjust its benchmarks to exclude so-called “sin” industries, including tobacco, alcohol and gaming establishments.
The Irish Association of Pension Funds (IAPF) has reportedly said that pension funds are confused over how they should apply ethical criteria to issues such as investments in companies in pariah countries like Zimbabwe. Jerry Moriarty, director of policy at the IAPF, told European Pensions & Investments News: “This kind of thing comes up quite regularly for the Irish National Pensions Reserve Fund (NPRF). It’s a very difficult area. The NPRF is signed up to the UN’s charter (UNPRI) and was one of the first sovereign funds to do so. “It’s difficult because how far down do you take it? Some of it was because they invest in BAT, which has tobacco farms in Zimbabwe, so does that mean they’re directly invested or not? It’s also difficult because irrespective of the issues in Zimbabwe, we need to know the stage at which it is it ok, and when it is not ok. And how quickly can funds react practically to those issues?” Recently Irish newspaper reports claimed the NPRF had nearly €500m invested in assets with links to Zimbabwe, a figure which the NPRF said was exaggerated.

The US state of New Hampshire has ordered its two public pension systems to shed any investments that support the Sudanese government, which is accused of a campaign of genocide and rape in Darfur. However, pension officials reportedly say the order could be unconstitutional and are mounting a legal challenge against. The funds have been given 90 days to identify problematic investments in companies doing business with the Sudanese government, including oil and arms trading. They then have 90 days to engage with the companies to remedy the problems, but, failing any action, would have to sell their investments. Opponents say the law is at odds with the trustees’ fiduciary responsibility and say the constitution says public retirement plans must make investment decisions “for the exclusive purpose” of benefiting current and future retirees and retirement funds and “shall not be encumbered for, or diverted to, any other purposes.”
New York Attorney General, Andrew M. Cuomo, has announced the first-ever binding and enforceable agreement for a major national energy company to disclose the financial risks that climate change poses to its investors. The agreement with Xcel Energy, requires it to provide detailed disclosure of climate change and associated risks in its Form 10-K filings, the annual summary report on a company’s performance required by the SEC. It comes as many power companies, including Xcel, are investing in new coal-burning power generation that will significantly contribute to global warming emissions. Cuomo said: “This landmark agreement sets a new industry-wide precedent that will force

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