RI Briefing, September 7: Investors write to Canadian govt in tar sands engagement

RI’s regular round-up of responsible investment news.

A group of leading institutional investors with combined assets of C$1.6trn (€1.1trn) has written to the Canadian government as part of a continuing engagement on the Alberta tar sands issue. In a letter to Environment Minister Peter Kent supporting the implementation of monitoring system for the region. Pension fund investors among the signatories to the letter – put together by NEI Investments – include four Swedish AP funds, British Columbia Investment Management Corp., BT Pension Scheme Management and the Healthcare of Ontario Pension Plan. Link

The US Securities and Exchange Commission (SEC) is reportedly asking oil and gas companies to provide detailed information on the environmental impact of hydraulic fracturing (fracking). The Wall Street Journal reports that the request includes details on the chemicals used for fracking and their efforts to safeguard the environment where drilling is taking place. The paper reports that the SEC wants to ensuring investors are being told about risks a company may face such as lawsuits and compliance costs. 

The UK Trades Union Congress (TUC) has called on the government to force companies to disclose directors’ pension arrangements for scrutiny by shareholders. The call came after the TUC issued a report revealing that directors of the largest 100 British companies are in line for average annual pension payments of £224,000 each. The UK National Association of Pension Funds told the Guardian newspaper that more transparency was needed around boardroom pensions.

SNS Asset Management, the Dutch funds firm, has expanded its environmental, social and governance (ESG) screening to include its SNS Euro Vastgoedfonds real estate fund, in a collaboration with GES Investment Services. “Real estate is an investment category in which much progress can and must be made on ESG issues,” SNS says. Link

European Commission President Jose Manuel Barroso has said the EU will promote the idea of a financial transaction tax before the G20 summit in Cannes, France in November, according to a Reuters report. “We will come out with a proposal for a European financial transaction tax and we are committed to explore this further also at the G20 level,” he was quoted saying.

A more colourful annual report makes investors value a company higher, claims a study from University of Miami School of Business School of Business Administration. The study found that investors, regardless of their experience, place a higher value on firms with attractive annual reports than they do on those that produce less attractive reports. The study found that annual reports that utilize more colour are perceived to have at least one percent higher annual revenues than those with lacklustre designs.Guidance on best practice in environmental, social and governance (ESG) integration in the banking sector is being put together following a series of roundtables run by the UN Environment Programme Finance Initiative (UNEP FI) and the EIRIS Foundation. “This guidance will be presented at UNEP FI’s roundtable in Washington DC in October 2011,” says EIRIS in a blog post.

Howard Schultz, CEO of Starbucks has written to the CEOs of companies listed on the New York Stock Exchange and NASDAQ calling on them to halt political campaign contributions. The 2012 US elections will be the first in the US where political donations are uncapped since the Supreme Court’s controversial Citizens United decision last year. 

The Wolfsberg Group, consisting of 11 of the world’s largest banking groups, has issued an updated version of its global anti-corruption guidance, designed to help firms mitigate bribery risks. Link

Companies with high ESG ratings outperform poorly rated peers – particularly during market stress, says Henderson Global Investors. “With each passing year the academic evidence – and increasingly the experience of practitioners too – points strongly to the conclusion that not only does SRI does not come with a performance penalty, but it actually delivers share price outperformance over a greater than three year time horizon,” says Head of SRI Research Seb Beloe.

The US Green Building Council, the non-profit group, has joined the Global Reporting Initiative as an organisational stakeholder. “By working with GRI, USGBC can remain on the front lines of performance reporting technology, and offer state-of-the-art tools and procedures to our green building community,” it said in a statement.
A new report from consulting firm Ernst & Young – How sustainability has expanded the CFO’s role – has highlighted the role Chief Financial Officers (CFOs) can take in sustainability. These include investor relations, external reporting and assurance, as well as “operational controllership” and financial risk management.

A group of international hotels is working together to standardize carbon accounting in their industry, according to reports. The Carbon Measurement Working Group is seeking to form a consensus on a single way of calculating carbon footprints and consistent metrics for communicating emissions.