RI ESG Briefing, Sept. 22: CalSTRS is lead investor in corporate energy productivity project

The round-up of the latest ESG developments


The California State Teachers’ Retirement System (CalSTRS), the $184bn US pension giant, is lead investor in a new corporate energy productivity project. It’s a partnership between CalSTRS, ClimateWorks Australia and the US-based ClimateWorks Foundation. CalSTRS’ Portfolio Manager, Corporate Governance, Brian Rice said it would “demonstrate the process investors need to implement to identify and engage with companies and succeed in improving energy productivity performance”. ClimateWorks Australia added it would quantify energy risks and the financial value of improving energy productivity for companies involved in the analysis. Announcement

The Massachusetts Pension Reserves Investment Trust (PRIT) Fund, which is overseen by Pension Reserves Investment Management Board (PRIM), lost a half billion dollars in its fossil fuels investments for the fiscal year ending June 30, according to an analysis by $2bn SRI firm Trillium Asset Management. The findings come amid state-wide fossil fuel divestment proposals. The study was requested by 350Mass for a Better Future Divestment Campaign. Trillium CEO Matthew Patsky said the fund “would be healthier today if its managers had taken steps to divest from these volatile investments years ago”.

A group of 33 luminaries, scientists and alumni – including linguistics pioneer Noam Chomsky, climatologist James Hansen and Rockefeller Brothers Fund President Stephen Heintz – have written to the Massachusetts Institute of Technology urging MIT’s $12.4bn (€11bn) endowment to divest from fossil fuels. Other signatories to the letter include author Naomi Klein; Bill McKibben, who started the fossil fuel divestment movement 350.org; and Hans Joachim Schellnhuber, Director of the Potsdam Institute for Climate Impact Research.

Novethic, the Paris based ESG media and ratings group has launched Carbon Risk, an educational and interactive web application that explains the financial risks of climate change to the public. Link

South Pole Group, the Zurich-based emissions reduction company, has partnered with Australian ESG research company CAER to sell investment portfolio carbon footprinting and analysis in Australian and New Zealand.


US-based SRI firm Calvert Investments has teamed up with Harvard professor George Serafeim to conduct joint research on responsible investing and responsible business. The partnership seeks to contribute to the public dialogue as well as provide investors with “actionable insights”; the first paper in the series looks at the role of the corporation in society and implications for investors. “In my opinion, George is the leading academic on materiality of ESG information, and that’s why I’m thrilled to be partnering with him,” said Calvert CEO John Streur.

The Detroit-based Kresge Foundation plans to invest 10% of its $3.5bn (€3.1bn) endowment in social programmes by 2020. According to the Detroit News, the $350m sum will go to six areas, including arts and culture; education; environment; health; human services; as well as community development in Kresge’s home base of Detroit.h6. Governance

‘Building real markets for the good of the people’ is the theme of an innovative Open Forum being planned by the Bank of England in London on November 11. “Everyone has an interest in the future of financial markets,” the bank says. Newton’s Helena Morrissey is among the organisers for the opening plenary session on the role of financial markets in the economy while Allianz’s Elizabeth Corley will look at the role of liquidity in the wider economy.

The US SIF: The Forum for Sustainable and Responsible Investment and a range of SRI investment firms say they “strongly disagree” with the recent decision by the US Court of Appeals for the District of Columbia Circuit on the conflict minerals provision (Section 1502) of the 2010 Dodd-Frank Act. “In granting companies the constitutional right to conceal important information about whether or not the minerals in their products originating from the Democratic Republic of Congo (DRC) or neighboring countries are conflict-free, the Court disregards investors’ interest in this information and opens the door to legal challenges to other types of corporate disclosures that are important to investors,” they said. They added the “misguided” ruling rests on a misinterpretation of the First Amendment’s right to free speech and that it “lacks a legal basis”.

Si2, the shareholder resolution research company, has published its post US proxy season analysis. It says the 2015 AGM season saw a drop in support overall and fewer negotiated withdrawals in some key areas, notably for greenhouse gas emission target setting and sustainability reporting. Average support for the Center for Political Accountability requests for more oversight and reporting about election spending reached an all-time high.

J. Safra Sarasin’s German affiliate lost €11m last year in part due to the legal wrangling over the bank’s prior sale of so-called “cum-ex” deals. Sarasin’s involvement with cum-ex deals, which imploded in 2012 after Germany closed a tax loophole, prompted a number of lawsuits from wealthy clients, investigations by German authorities and the resignation of several senior bank executives, including Deputy Chief Executive Eric Sarasin. “Particularly the media coverage of the cum-ex deals has depressed the German unit’s business,” Sarasin said in its 2014 report, adding that the affiliate would face more cost cutting.

Swiss re-insurance giant Swiss Re has been included in the Global Challenges Index (GCX), the 50-member German sustainable equity index run jointly by sustainability research firm Oekom and the Hanover bourse. Swiss Re replaces Austrian water equipment firm Best Water Group, which has been de-listed. In a statement, the bourse said Swiss Re was selected to replace Best Water for three reasons: It ensures that human and labour rights are respected in an array of industries for which it helps to insure; it provides insurance products to people of low incomes; and it integrates ESG (environmental, social and governance) factors into its investing. Launched eight years ago, the GCX has since attracted more than €300m in assets.