RI Briefing Nov. 2: Threadneedle announces controversial weapons investment policy

RI’s regular round of responsible investing news

Asset manager Threadneedle Investments has announced that it will now longer invest in companies involved in controversial weapons. “Where a company is verified to undertake such activities, Threadneedle’s policy is not to invest in the securities issued by that company,” the UK-based firm said in a statement. But it reserves the right to take short positions on such shares, it added.

The largest listed companies in the US are voluntarily moving to disclose their corporate political spending, according to the new CPA-Zicklin Index of Corporate Political Disclosure and Accountability. “Our findings are striking,” said CPA President Bruce Freed. “They offer hope for increasing corporate political transparency and accountability at a time when everyone expects massive hidden spending to influence elections.” Link

South Korea-based environmental, social and governance (ESG) research house SolAbility has released its fifth annual ESG review of Korean companies. “Sustainable companies in Korea have consistently outperformed the market since the first ESG review in 2007 by margins far beyond statistical coincidence,” it finds. But the full extent of cost-savings potential and new business opportunities had not yet been fully realised. Link

The Carbon Disclosure Project, the global investor-backed initiative, has invited 140 of the world’s biggest cities to report information on their greenhouse gas emissions and climate change strategies. The CDP is also asking cities, for the first time, to report on their water use and water. Cities have until early March 2012 to disclose to the CDP and public responses will be made available through www.cdproject.net and an analysis of the findings will be released in June 2012. Link
Asset managers’ pay has risen for a second successive year, according to consulting firm PricewaterhouseCoopers. PwC’s annual asset management report – which surveyed 25 firms in Europe – found asset manager remuneration increased by an average 18% over the last year and company salary bills increased by an average of 4%.

Sustainability media firms Sustainable Industries and Triple Pundit have announced a merger. Both brands will remain separate but there will be “efficiencies” through shared resources and operations, cross-platform business development and the integration of web sites. The merged company plans new products in late 2011 and throughout 2012, they added.

A group of major global banks, Barclays, UBS, Credit Suisse and UniCredit – the ‘Thun Group’- are working on a practical guide to applying the UN’s ‘Guiding Principles on Business and Human Rights’ (“Ruggie” framework). The group has worked to propose actionable steps on a subset of the principles that they could take to “operationalize” them, UBS said.Resource scarcity such as peak oil or water shortages has been included for the first top in the top 15 ‘extreme risks’ bi-annual research put out by Towers Watson, the investment consultant. It was ranked as number 11. Climate change rose one spot to number 6 from 7 since 2009 when the research was last carried out. The top five extreme risks in order were named as: depression, hyperinflation, sovereign default, banking crisis and currency crisis. The ranking categorises events that would have a high impact on global economic growth and asset returns if they occurred, and incorporates the degree of certainty in assessing the risk.

The Monetary Authority of Singapore, the central bank, plans to tighten up its rules on illicit financial flows. “Singapore intends to make criminal the laundering of proceeds from tax offences,” said MAS Managing Director Ravi Menno in a speech. “As other jurisdiction tighten their regimes and tax evasion monies seek cover, Singapore is sending a clear message that it neither wants nor will tolerate these illicit inflows.”

A new study from Aperio Group, the US asset management firm, called Measuring the Risk Impact of Social Screening presents a framework, with metrics, for assessing ESG integration in portfolios “with the same rigor and discipline” used in all other fiduciary decisions. “With this framework, there is no reason for ESG skeptics and proponents not to measure the impact and quantify what is right for the investor and their portfolio,” says author Patrick Geddes. Link

The mindsets of boards “have to change” is the theme of Global Reporting Initiative and International Integrated Reporting Committee Chairman Professor Mervyn King’s speech in acceptance of the World Federation of Exchanges’ Award for Excellence. The speech is available here

‘Financing Sustainability: Insights for Investors, Corporate Executives, and Policymakers’ is a new book exploring both the challenges and opportunities in financing sustainability. It was written by Marco Kerste, Nicole Rosenboom, Bernd Jan Sikken and Jarst Weda and is a co-production between Duisenberg school of finance and SEO Economic Research and was commissioned by Holland Financial Centre. “This book will create the necessary awareness and provides the reader with unique insight in financing sustainability,” said Angelien Kemna, Chief Executive, APG Asset Management.

Bank Sarasin has been named “Best Private Bank for Socially Responsible Investing” by the Financial Times Group’s Banker and Professional Wealth Management magazines for the second consecutive year. Announcement