RI News in Brief: April 11: Ortec Finance, Follow This, Facebook, FRC, CDSB

The bite-sized news you need to know about.

Ortec Finance, the Dutch financial consulting company known for its asset liability modelling, has launched a new Strategic Climate Solutions team, which will integrate climate data into its models. The Rotterdam-headquartered company has hired Willemijn Verdegaal, a former advisor for Responsible Investment & Governance at MN, the investment manager for the Dutch metalworkers pension scheme, as Co-Head of the new team. The other new Co-Head hire is Lisa Eichler, who was formerly Founding Partner at Terra Consulting, an advisory firm based between Frankfurtn and Rotterdam, which public and private sector clients on environmental solutions. Ortec Finance said: “Where to date most climate-related risk data sets and stress testing tools tend to be stand-alone products, we see a clear opportunity to integrate this information into Ortec Finance’s existing unique technology and solutions. This allows us to bring ‘climate’ into the mainstream of our bespoke strategic investment advisory services.”
Pensioenfonds Detailhandel, the €17bn Dutch retail trade pension fund with an interest in SRI policies, could support the Follow This climate change resolution at Shell’s AGM, which will be held in The Hague on May 22. Henk van der Kolk, Chairman of Pensioenfonds Detailhandel, said at an event last week that he saw no reason not to vote in favour of the resolution, which is the third year it has been co-filed alongside ShareAction, the UK NGO. Pensioenfonds Detailhandel abstained from voting in the previous two years. In 2017 Follow This’ proposal won more than 6% of the votes with support from institutional investors including MN, Actiam, Achmea IM, Van Lanschot Kempen, the Church of England and Aviva.
The Colombo Stock Exchange (CSE) has launched Communicating Sustainability, its guidance on ESG reporting, fulfilling a commitment the exchange made in 2017. The CSE joins 37 other exchanges worldwide to provide guidance on reporting on ESG issues for listed companies in their markets, and a further 10 are committed to producing such guidance. CEO Rajeeva Bandaranaike said: “CSE wishes to publicly demonstrate its commitment to sustainability, while promoting better business practices within the Sri Lankan capital market.”
The Climate Disclosure Standards Board (CDSB) has announced that its Framework for reporting environmental information, natural capital and associated business impacts has been aligned with the recommendations of the Task Force on Climate-related Financial Disclosures, at an event marking CDSB’s 10th anniversary, t. In collaboration with the Task Force, the CDSB also said it will launch in May a TCFD Knowledge Hub, an online platform to help organisations integrate climate risk into financial statements, as recommended by the TCFD’s final report published in June 2017. http://www.tcfdhub.org/*Christopher Ailman, CIO of the California State Teachers’ Retirement System (CalSTRS), has deleted his Facebook account* because of the firm’s “offensive” management. Ailman tweeted: “I have deactivated my Facebook account. Their lack of oversight and poor management is offensive. #DeleteFacebook.” The comment came two weeks after it was revealed that political analytics firm Cambridge Analytica had harvested data from 50 million Facebook profiles without users’ consent. CalSTRS manages $224.4bn in assets and owns $650.4m in Facebook shares. In an interview with CNBC, Ailman said: “They have to deal better with their privacy issues. We’ve been unhappy about the governance [in Facebook] because as shareholders we have almost no say, because [CEO Mark] Zuckerberg just controls that thing.
Three major US energy companies have agreed to explain how they can adapt to a lower carbon future following pressure from the NYS Common Retirement Fund. The fund has since withdrawn the shareholder requests it filed with DTE Energy, Dominion Energy and Southwestern Energy, calling on the companies to explain how they can meet Paris Agreement global greenhouse gas (GHG) reduction goals, as well as to assess the impact of regulatory and technological efforts to curb climate change. NYS Comptroller Thomas DiNapoli said: “Corporations need to recognize that a transition to a lower carbon economy is already underway and their future success demands adjusting to this new reality. We will continue to monitor and engage with these companies as they report on their efforts to reduce carbon emissions.”
The UK Financial Reporting Council (FRC) is updating its sanctions guidance by implementing the recommendations of an independent review of sanctions, with effect from 1 June 2018. The review, undertaken in 2017 by a panel chaired by former Court of Appeal Judge Sir Christopher Clarke, recommended: an increase in fines to £10 million or more for seriously poor audit work by a Big 4 firm; exclusion from the accounting profession for a minimum of 10 years for dishonesty; greater use of non-financial penalties; sanctions that reflect the level of cooperation by respondents. The FRC has also published updated guidance for the Tribunal that hears FRC Enforcement cases involving auditors, accountants and actuaries.
The €3.4bn pension fund of Dutch technical research institute TNO is to divest from tobacco holdings, in line with its policy for responsible investment. The move will see TNO sell its holdings in 12 companies that generate more than 5% of their turnover from tobacco. TNO joins other large pension funds that have divested from tobacco, such as healthcare scheme PFZW, civil service pension fund ABP, metal scheme PME and the multi-sector pension fund PGB.