RI Briefing, May 11: New database on controversial weapons launched

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

Germany’s Oekom Research has launched a database on controversial weapons. The sustainability ratings firm reckons there are around 200 companies globally involved. It said: “These include not only issuers of shares and bonds but also companies which are of relevance more from a lending and insurance point of view.”

Asset manager Royal London Asset Management has launched a new UK ethical equity fund to meet client demand and complement its existing ethical bond fund. It will invest primarily in UK-listed companies and will consist of a concentrated portfolio of 40-60 holdings. It will be managed by Bradley Mitchell, who formerly ran the Scottish Life Ethical Equity Pension Fund. Screening will be provided by research firm EIRIS.

The Financial Reporting Council, the UK watchdog that oversees the Stewardship Code, has formed a “European Issues Steering Group” with the government’s Business, Innovation and Skills (BIS) department to “coordinate influencing activities and approaches across the range of UK stakeholders”, according to its new annual budget document

Socially responsible investment in Canada has “weathered the turmoil” of the global meltdown and still represents about a fifth of assets under management in Canada, according to the Social Investment Organization. As at June 2010, assets under SRI guidelines were $530.9bn (€384.9bn). “SRI has shown resilience in the face of tough times brought about by the financial crisis of 2008,” says Eugene Ellmen, SIO Executive Director.

Bankhaus Schelhammer & Schattera, Vienna’s oldest private bank, has launched an ethical savings product. The “Ethiksparbuch” allows investors to support sustainable economic and social development – and gives them the opportunity to invest in companies and countries which meet strict ethical and sustainability criteria. Link (German)

Bayerische Versorgungskammer (BVK), the first German pension fund to sign up to the UN PRI, has hired Oekom as its ESG research provider. The fund says it plans to pursue a policy of active corporate engagement based on Oekom’s ratings. BVK is the joint executive body managing twelve autonomous occupational and local authority retirement pension schemes covering approximately 1.8m insured persons. It runs assets of €50bn.

WHEB Asset Management’s Sustainability Fund has been added to the Skandia Investment Solutions platform, reflecting increased interest from IFAs (independent financial advisors). The fund, launched in 2009, focuses on global companies providing solutions to climate change and the energy challenge, water shortages and ageing populations.

US custody and asset management giant Bank of New York Mellon has disclosed in its latest CSR report that its Mellon Capital arm had $7.8bn (€5.4bn) in socially responsible investing/environmental, social and governance (SRI/ESG) related assets at the end of 2010 – of which $4.7bn were indexed and $3.1bn active. The overall figure is flat with the 2009 number, when the indexing/active split was reported as $4bn/$3.8bn. The report adds the company is forming a CSR Council of senior managers.

The United Nations-backed Principles for Responsible Investment is partnering with the Office of the Secretary of State to develop a global asset owner-based research study focused on impact investments. Everybody who completes the survey will be entered into a $250 prize draw.

The Norwegian finance ministry has published an assessment of how the NOK3.1trn (€396bn) Government Pension Fund is adhering to the Santiago Principles, the Generally Accepted Principles and Practices developed by the International Forum of Sovereign Wealth Funds. The 22-page report is available here

The proportion of companies pursuing a sustainability strategy has risen from approximately 50% to 62% since 2008, and is almost 80% for larger companies with a turnover of at least $1bn, according to a KPMG survey of 378 companies in Europe, the US, Canada and the Asia-Pacific region. It said 61% of those surveyed were convinced that implementing sustainability programmes paid off, either through cost reduction or increased profitability. Link to report

Banking giant Citigroup has added socially responsible investment (SRI) solutions to its securities lending cash collateral investment program – in partnership with research house Sustainalytics. Under the new plan, securities lending clients will now be able to invest cash collateral under SRI principles.