RI Briefing, April 20: AFL-CIO unveils Executive PayWatch site

RI’s regular Wednesday round-up of responsible investing news

US labour federation the AFLCIO (American Federation of Labor – Congress of Industrial Organizations) has launched the latest version of its Executive PayWatch web site, pointing out that the average CEO salary is $11.4m, a rise of 23% over 2009. The site features a searchable database of CEO pay.

Det Norske Veritas, the global risk management advisor, has been appointed as ethical consultant by Norwegian church investor Opplysningsvesenets Fond. According to the contract award notice, the four-year, NOK2.1m (€270,000) appointment also covers “assistance in connection with reporting” to the UN Principles for Responsible Investment and “assistance in connection with owner influence in companies”.

A new study on executive pay at companies on Germany’s DAX index by consultants Towers Watson has found that the new remuneration law (VorstAG) is having an effect. “The new regulations, including VorstAG and the Corporate Governance Code, are reflected in executive compensation that is geared more toward the long term and sustainability,” said Olaf Lang, head of Talent & Rewards at Towers Watson. Link

Brazilian exchange BM&FBOVESPA has launched its “Em Boa Companhia – Programa de Sustentabilidade com Empresas” (In Good Company – Sustainability Program with Firms). It said it aims to “deepen discussions about the everyday impact on companies of sustainability management and social investment”. The exchange also launched a publication, New Value – Sustainability in Companies, How to Start, Who to Involve and What to Prioritize.

Domini Social Investments’ Domini Social Equity Fund ranked in the top 10% of its peer group for the 1-year and 3-year periods ended March 31 2011, the firm said. “Our fund shareholders appreciate the fact that we work on their behalf to bring universal human dignity to those who lack it and ecological sustainability to our planet,” said company founder and CEO Amy Domini.

French activist asset manager PhiTrust Active Investors is set to launch an open-ended collective investment scheme or SICAV to encourage “social business” in major European companies in the Eurostoxx 50 index, according to reports.UK-based asset management giant Legal & General Investment Management has hailed its signing up to the UN Principles for Responsible Investment, saying: “This is significant both for LGIM and the global investment community as LGIM is one of the largest index tracking managers to be participating in the scheme worldwide.” It expanded its “long-established UK corporate governance and voting activities” to the major international equity markets in 2010, the firm adds in its new annual report.

The Global Reporting Initiative is encouraging more companies to be transparent about their impacts on the world via its new ‘Report or Explain Campaign Forum’ – a “convening space” for organisational sustainability disclosure. “A report or explain approach could persuade more companies to report rather than to explain why they don’t,” said GRI Deputy CEO Teresa Fogelberg.

Nearly 55% of US executives say their firm has a formal sustainability strategy in place, according to KPMG International’s Corporate Sustainability: A progress report. Another 12% say they are working on a strategy and an additional 19% expect to eventually develop a formal plan. The study was released in connection with the launch of the new Netherlands-based KPMG Global Center of Excellence in Climate Change & Sustainability.
Credit Suisse is predicting a “new era of sustainable investments”. The giant Swiss bank said the Gulf of Mexico oil spill last year and the nuclear crisis in Japan suggest social and environmental issues can have a very real impact on a firm’s business strategy and financial performance. “More investors are realizing that sustainability issues can play a key role in enhancing long-term shareholder value,” it said.

Norwegian investor KLP is taking steps to make its corporate social reporting (CSR) “more relevant, meaningful and interesting for our stakeholders”. It is integrating social responsibility into the Board’s annual report, with the information now on the web. It added that an analysis of what is important and relevant will form the basis of its corporate responsibility reporting.