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RI Briefing, Nov. 16: Pensions guru Ambactsheer: sustainable investing can buck headwinds capitalism

RI’s regular round-up of responsible investing news

Keith Ambachtsheer, Director of the Rotman International Centre for Pension Management at the University of Toronto, delivered the annual Fair Pensions lecture at the UK House of Commons yesterday. His topic was: Wealth across Generations: Can Pension Funds Shape the Future of Capitalism? “It is within our reach to move capitalism in a direction that is more wealth-creating, more sustainable, less crisis-prone, and more legitimate than the ‘headwinds’ capitalism we have today,” he argued, citing the example of the concentrated responsible equity portfolio run by Dutch pension fund giant PGGM.
Link to speech

CalPERS, the largest pension fund in the US, has approved new guidelines calling on investee companies to disclose their political contributions on a yearly basis, according to a Bloomberg report. It said the governing board of the $227.5bn California Public Employees’ Retirement System was responding to a call from California Treasurer Bill Locker. Fellow California fund CalSTRS enacted a similar rule earlier this month.

Anti-corruption group Transparency International will announce the winner of its global Integrity Awards at a ceremony hosted by the International Anti-Corruption Academy (IACA) on November 24 as part of the 11th European Partners Against Corruption (EPAC/EACN) Annual Professional Conference. Link

Islamic finance assets could double to $1.8trn (€1.3trn) by 2016, according to research from Deutsche Bank, cited by Reuters. “The Islamic credit market may represent a more feasible and shorter-term reality for the corporate space than for the sovereign space,” said the report, led by Deutsche Bank analyst Ryan Ayache.

The Inter-American Development Bank has released the first survey about environmental, social and corporate governance sustainability of banks in Latin America and the Caribbean. It showed that 98% of the 55 financial institutions surveyed have policies to combat money laundering and 93% have policies on fight bribery and corruption. Yet only 62% incorporate environmental and social standards and just 36% have initiatives to reduce direct greenhouse emissions.

The Invest in Med programme has issued a report looking at how socially responsible investment might be encouraged in Mediterranean countries:
Link to report*Risk analysis firm Maplecroft* has launched a new country-level ESG (environmental, social and governance) evaluation tool to provide “instant analysis” for investors. The ESG Atlas and Risk Calculator has been developed to allow investors to undertake their own evaluation of country-level ESG risks to suit risk appetites, investment screening and other criteria. It allows users to choose across ESG issues from 47 risk indices to create country scorecards and a bespoke global ESG dashboard.

Oxford University’s Gordon Clark has published a paper – Fiduciary duty, statute, and pension fund governance: the search for a shared conception of sustainable investment – in which he argues that fiduciary duty is a “chimera”. “At worst,” Clark writes, “fiduciary duty remains as a trump card for those that would wish to protect their own interests in the face of obvious demands for profound change in the nature of investment practice.”

The International Integrated Reporting Committee has changed its name to the International Integrated Reporting Council. The IIRC says it plans to launch a Global Stakeholder Forum in 2012 – with membership open to all organizations that support the IIRC’s work. It also said that Leslie Ferrar (Treasurer, Household of the Prince of Wales and the Duchess of Cornwall) and Christy Wood (Chair of the International Corporate Governance Network) have been appointed as Deputy Chairmen. Announcement

Social Finance, the UK non-profit social investment organisation, has launched a pilot Investor Advisory Service. The is led by John Kingston, the former chair of the Association of Charitable Foundations and will initially work with charitable trusts and foundations and private banks to identify where these organisations and individuals would benefit from support to engage with social investment. Social Finance also plans to launch a practical guide to social investment for charitable trusts and foundations early next year.

UNEP FI in collaboration with the Global Footprint Network, the international sustainability think tank, is to investigate the linkages between ecological risk and country-level risk in sovereign bonds. Its aim is to develop a methodology to explore how credit rating agencies, investors and financial information providers could integrate ecological data into bond models.