RI ESG Briefing, Aug. 30: US SIF publishes SRI guide for pension plans

Environmental

US SIF, The country’s Forum for Sustainable and Responsible Investment, has released a five-step guide for pension plan sponsors considering the “addition of a sustainable and responsible investment (SRI) option to their defined contribution (DC) retirement plans”. Despite increased interest in sustainable investment, the US sustainability body claims currently less than 1% of assets owned by the country’s 2,390 private-sector retirement plans are invested in funds that explicitly market themselves as SRI. Changes to guidance on the Employee Retirement Income Security Act (ERISA) by the US Government in 2015 were seen by many as removing an obstacle for pension funds to consider ESG issues.
The European Bank for Reconstruction and Development (EBRD) and France’s Proparco have each committed $58m towards the construction and operation of two 50MW Egyptian solar power plants. The two projects are the first under the EBRD’s new $500m framework for renewable energy in Egypt, which is expected to finance a total of 16 projects, delivering 750 MW of capacity. To date, the EBRD has invested €2.6bn in 49 projects in the country.
Global Evolution, the Danish emerging and frontier markets boutique manager, has partnered with the US University of Vermont to give two students on its Sustainable Innovation MBA programme the opportunity to gain practical experience of the emerging and frontier markets. Working with Ole Jørgensen, Global Evolution’s Research Director, the students will help develop recommendations to expand Global Evolution’s ESG model and offering in North America.

Social

Voya Financial, the listed asset manager – formerly the US arm of ING Group – has announced it has partnered with Diversity Lab to support its new law firm-focused diversity initiative. The Mansfield Rule initiative measures whether law firms are actively considering qualified women and attorneys of colour for promotions, senior level hiring, and significant leadership roles.
JP Morgan Chase & Co. has committed up to $2m to fight racism and support human rights in response to thewhite nationalist rally in Charlottesville, Virginia, Reuters reports. The sum includes $500,000 each to the Southern Poverty Law Center and the Anti-Defamation League, and as much as $1m more will be contributed in ‘two-for-one matches’ of donations by employees to “a wide range of human and civil rights organisations”. Jamie Dimon, CEO of JP Morgan, has said he “strongly” disagreed with Trump, as he and other CEOs moved to disband an advisory panel to the President.
The Rockefeller Foundation has reportedly donated to Impact Shares, the US socially-focused non-profit exchange traded fund platform. The $300,000 grant will be used to create investment strategies, in collaboration with other non-profits, that achieve their “financial goals whilst pursuing specific social objectives”. Impact Shares will be launching the first of its social issue-related ETFs later this year.

Governance

The Pensions and Lifetime Savings Association (PLSA) has found that 86% of UK pension funds it polled believe that executive pay in listed companies is too high. The UK’s pension industry body published its findings as the Government unveiled its new corporate governance laws. The Government’s proposals, taking effect from June 2018, compel companies to disclose the pay gap between their Chief Executive and average workers – something 84% of the PLSA members have cited as a concern. Neville White, Head of SRI Policy and Research at EdenTree Investment Management, is reported to have sharply criticised the Government’s “watered down proposals”, stating that: “the announcement today presents another wasted opportunity to engage seriously with the social divisions caused by runaway executive pay”.

SUSI Chief Executive Tobias Reichmuth is reportedly one of group of Swiss investors behind the launch of the world’s first global crypto finance conference. Scheduled to take place ahead of The World Economic Forum 2018 in Davos, the Switzerland based conference aims to explore the fledgling crypto currency and blockchain industry, including the opinions of risk specialists and regulators. The conference will be held between 17-19 January 2018. Susi is a dedicated sustainable investment house.