RI ESG Briefing, Dec. 11: Ranking of asset owners’ climate disclosure launched

Environmental

The Asset Owners Disclosure Project, the not-for-profit organisation, has launched its first index showing how the world’s biggest institutional investors are managing climate risk – finding that a lot of them “have their heads in the sand”. The index was built following information requests to the world’s 1,000 largest asset owners with a combined asset base of US$60trn. Australia’s Local Government Super ranked first in the list, with South Africa’s Government Employees Pension Fund (GEPF) second and CareSuper (Australia) third. The top 10 was rounded out by the Netherlands’ Stichting Pensioenfonds Zorg en Welzijn (PFZW), Cbus Super (Aus.), British Columbia Investment Management Corp., APG, VicSuper and AustralianSuper. Only the GEPF has calculated its exposure to overstated fossil fuel reserve valuations via the balance sheets of its investee companies.

French bank Societe Generale says it has achieved carbon neutrality in 2012, with CO2 emissions per employee having been reduced by 20%, above the 11% target it set itself. In 2011, the Group was one of the first banks to implement an internal carbon tax, which allowed carbon credits to be purchased and encouraged each entity within the Group to control its environmental impact. Revenues from this scheme have gone to financing internal environmental efficiency projects.

A European pension fund has tendered a $50m private equity renewables mandate via the IPE-Quest asset manager search facility (search no. 1265). The closing date is December 20. Link

Social

Dutch media industry pension fund, the €4bn PNO Media, has decided to exclude Honeywell and URS of the US and Rolls-Royce of the UK over their involvement in nuclear weapons, according to a report on IPE.com citing fund officials. It follows pressure on the fund from the Campaign against Weapons Trade group. The fund will also add press freedom as an exclusion criterion for its investments.

Investment consulting firm Cambridge Associates has outlined a framework for social investing in the UK in a new report called The UK Social Investment Market: The Current Landscape and a Framework for Investor Decision Making. Cambridge argues that a traditional risk-to-return approach – similar to that used in evaluating any investment – is the best framework for evaluating social investments. But the framework needs to consider the “combined return”.h6. Governance

Dutch civil service pension fund ABP says it has settled its financial crisis-related lawsuit with J.P. Morgan Chase over sales of residential mortgage-backed securities. “ABP is very content to have reached this settlement and is pleased that J.P. Morgan was willing to reach a mutually satisfactory conclusion of this litigation,” the €274bn fund said, without revealing the size of the settlement. The suit was filed in December last year and accused the bank of negligent misrepresentation.
The European Commission is set to unveil its Action Plan on European company law and corporate governance tomorrow. “On December 12, the Commission will present an Action Plan outlining the initiatives that the Commission intends to take in order to modernise European rules on company law and corporate governance,” says a Commission calendar entry.

The Council of Institutional Investors (CII), the US body representing investors with combined assets of more than $3trn, is holding a teleconference on ‘Libor and the future of benchmarking the cost of borrowing’ on December 18. Panelists include Robert Eisenbeis, formerly of the Federal Reserve Bank of Atlanta, and Allan Mendelowitz, former chair of the Federal Housing Finance Board. The call will be moderated by Greg Smith, executive director of COPERA and chair of the Council’s policies committee.

The $75bn North Carolina Retirement Systems is leading a group of institutional investors who been named as the lead plaintiffs in an investor lawsuit against Facebook and the underwriters of its initial public offering (IPO). Other pension investors involved include the $11.3bn Arkansas Teacher Retirement System and the $2bn Fresno County Employees’ Retirement Association.

The Australian Institute of Company Directors says female directors currently comprise 15.2% of the boards at major companies listed on the ASX 200. It also found they are “generally younger than their male counterparts” – in their 50s rather than their 60s. There’s now “greater gender and age diversity” the institute says.

The Chicago-based Policemen’s Annuity and Benefit Fund has been allowed by a New York federal judge to continue a financial crisis-related class action against Bank of America and US Bancorp. The fund alleges they didn’t protect investors in their roles as trustee for mortgage-backed securities issued by Washington Mutual Inc., according to reports.