RI Briefing, Dec. 14: $4bn set to go into impact investments – JP Morgan

Almost $4bn will go into impact investments in the next year, according to a new survey from JP Morgan and the Global Impact Investing Network. It polled 52 high net worth and institutional investors, in an online survey, who indicated they plan to invest a total of $3.8bn in the 12 months following the survey. And it found that impact investments were expected to constitute 5%-10% of portfolios in 10 years. “While this may be optimistic, respondents also pointed out that the market is still in its infancy with challenges that reflect the market’s nascent stage, like a lack of substantial track record,” the 30-page report said.

Two Australian super funds that are signatories to the United Nations Principles for Responsible Investment are to merge next year. The combination of the Australian Government Employees Superannuation Trust (AGEST Super) and AustralianSuper will result in the latter having total funds under management to A$46bn (€35.2bn). Announcement

Eurazeo, the €4bn French investment company that is 18.6% owned by Credit Agricole, has signed up to the UN Principles for Responsible Investment. Other recent signatories include MIR Investment Management and Plato Investment Management (Australia), PanAgora Asset Management (US) and France’s Cap Decisif Management.

Major South African financial services group Sanlam has also committed to the PRI, according to its executive head of Group Corporate Affairs Lulu Letlape. Its fund subsidiary Sanlam Investment Management is an existing signatory.

Rabobank and National Australia Bank have become the first financial institutions to endorse the Natural Capital Declaration, a statement by the financial sector demonstrating commitment to integrating ‘natural capital’ criteria into financial products and services. The Declaration, initiated by the UN Environment Programme’s Finance Initiative, will launch at the Rio+20 Earth Summit in June 2012. Link

The Bolsa Mexicana de Valores (BMV), the Mexican stock exchange, has announced the launch of its 23-member sustainability index. The index is based on the 70 most liquid shares on the exchange; companies eligible for inclusion on the index are assessed according to their performance, impact and responses to emerging environmental, social and governance (ESG) issues. Research will be provided by UK-based ESG house EIRIS and its local partner Ecovalores.Dutch pension investment giant PGGM has developed a tool to measure the social effect of its environmental, social and governance (ESG) investments, according to a report on IPE.com which cited Marcel Jeucken, head of responsible investment. It said PGGM will launch a series of pilot projects next year with external asset managers. The investor has built the tool with Rotterdam’s Erasmus University, the report added.

Ethos, the Swiss pension fund-owned governance company, has teamed up with Transparency International Switzerland to examine the legal framework surrounding corruption at Swiss companies. They found “significant shortcomings” which show the limits of self-regulation – and called for a strengthening of legislation, like in the US and UK.
Activists have criticised the Norwegian government’s decision to reject a recommendation by the Council of Ethics to exclude PetroChina from the Government Pension Fund over its involvement in a pipeline project in Burma. “It is shameful that the Norwegian government is endorsing human rights abusers in Burma through the investments of its pension fund,” said Wong Aung of the Shwe Gas Movement, quoted by Norway News.

There’s been a call for the environmental, social and governance (ESG) agendas of both institutional investors and companies to be aligned. “The ESG debate is still dominated by good intentions and is falling short of actual progress,” write Wouter Scheepens, partner at Steward Redqueen and Marleen Janssen Groesbeek, sustainability policy adviser at Eumedion, in the Financial Times.

The Global Reporting Initiative, the non-profit organization that provides the GRI sustainability reporting framework, has launched a new website www.globalreporting.org to be a hub for sustainability and reporting information worldwide. It also provides improved features for experienced reporters and other stakeholders; a new resource library holds all of GRI’s publications in one place.

The total average pay of senior management at FTSE 100 companies has risen 27-fold to £4m in nearly 25 years, according to a new academic study, cited by the Financial Times. Annie Pye, professor of leadership studies at the University of Exeter, interviewed over 100 board members, investors, recruitment firms and regulators, including directors of leading firms like Lloyds Banking Group, Marks and Spencer and Prudential.