Return to search

RI ESG Briefing, November 20: DWS calls for more central banks to sign up to PRI

The round-up of the latest ESG market developments

Environmental

German fund firm DWS has called on central banks to sign up to the Principles for Responsible Investment, following the lead of the Netherlands’ DNB. It comes as NGO Positive Money Europe has called on the European Central Bank to go further in tackling climate change, following a speech by ECB Board member Benoit Cœuré laying out his vision on how it can and should address the issue. While welcoming Cœuré’s focus on helping market players to identify and manage climate-related risks, Positive Money Europe says the ECB can do more through its quantitative easing and collateral frameworks.

GRAIN, a community farming non-profit, has released a report on the ramping-up of pension fund investments into farmland and the “major implications for rural communities and food systems”. The report identified 76 public and corporate pension funds with investments in farmland, which it estimated had allocated a total of $14.8bn, mostly from North America and Europe. According to GRAIN, farmland acquisitions could result in the displacement of “peasants and indigenous people” and the risk of scandal due to “notoriously corrupt” land markets. The report emphasises the danger of a mass transfer of land from small farmers to financial corporations in a “near total absence of public debate and regulation”, calling it a “recipe for disaster”.

Campaign group Greenpeace and others have reportedly called on Norway’s $1trn Government Pension Fund Global sovereign fund to divest its $169m stake German utility RWE over its coal-fired power plants in a report called ‘Last Gasp: The coal companies making Europe sick’. News agency Reuters quoted RWE as saying RWE was unable to comment specifically on the report and added the investor declined to comment.

Coca-Cola, PepsiCo, Caterpillar Foundation, and Levi Strauss & Co. are among South Africa’s first major corporates to support the Greater Cape Town Water Fund. Pioneered by the Nature Conservancy, Water Funds identify large-scale water users in need of secure and clean supplies ‘downstream’ to pay for nature-based programmes to improve water quality and quantity ‘upstream’. Close to R53m ($4m) has been committed to the Water Fund so far. Funding is expected to be a mix of public, private and philanthropic finance.

Social

Future Planet Capital has acted as founding investment partner for impact investment platform Align17, which launched in collaboration with UBS. Align17 is a private, digital marketplace that uses the UN Sustainable Development Goals (SDGs) as a framework to present tailored opportunities to investors.

ESG factors are becoming more prevalent in the fixed income space, a new Cerulli report has found, with net new flows to ESG bond products surpassing €10bn annually in the past two years. The report said the challenges to ESG integration in the bond market included the shortage of sustainability indices and the scarcity of ESG-focused products.h6. Governance

Britain’s Quakers have announced they will not invest in any “companies profiting from the occupation of Palestine”. Paul Parker, recording clerk for Quakers in Britain, said: “We look forward to the publication of the UN Business and Human Rights Database which will list companies involved in settlement-related activities in occupied Palestine. We recognise the help this – and others including the Investigate database compiled by the American Friends Service Committee – will give our investment managers in implementing this new policy.” A 2011 boycott by the Quakers of goods made in occupied Palestine by Israeli settlements was reaffirmed by the church.

Airbnb announced that it will remove approximately 200 listings in Israeli settlements in the disputed West Bank. According to the home-sharing platform, it has developed a framework to evaluate “these types of situations” which include consulting experts and stakeholders, evaluating its contribution “to existing human suffering” and assessing safety risks. In its statement Airbnb acknowledged that business operations in the occupied territories is currently permitted under US law.

Online investment platform OpenInvest, which lets users customise portfolios to their values, has created a ‘dark money’ screen. It allows the tailoring of portfolios to companies prioritising transparency in their lobbying and political spending. Over the last several years, shareholders have formally asked almost 200 S&P 500 companies for increase accountability and disclosure – and over half of those companies agreed.

The Philippines Securities and Exchange Commission regulator has announced it will release ESG reporting guidelines before the end of the year. The non-financial information the guidelines will require companies to disclose will relate to areas including resource management, ecosystem and biodiversity, environmental impacts, employee management, and supply chain management.

Concerns about performance and difficulty in evaluating investment products and strategies are the top factors preventing US non-profit organisations from investing in sustainable investments, according to a survey commissioned by fund firm SEI Investments. It found a majority of non-profit organisations do no invest in sustainable investing strategies. Of those who do, energy-related investments, such as renewables and efficiency initiatives, are the most popular.

Sumitomo Forestry and Oji Holdings, Bank Negara Indonesia (BNI) and SMBC Group are among Indonesian and Japanese banks and investors that campaigners say are financing and profiting from the human rights abuses and rainforest destruction carried out by forestry giant Korindo Group. A new report from Rainforest Action Network and others found the Korean-Indonesian conglomerate was involved in primary forest clearance, intentional burning, land grabbing and police harassment and arbitrary arrest of local people.