Environmental
The Norwegian Government Pension Fund has reportedly asked the country’s Ministry of Finance to shift part of its giant portfolio into green infrastructure projects such as wind turbines and solar parks. Media reports in Norway quoted Yngve Slyngstad, CEO of Norges Bank Investment Management and Jon Nicolaisen deputy governor of Norges Bank, as saying Norges “believes it will be possible to carry out investments in infrastructure for renewable energy with the same profitability requirements as other investments”.
While helpful, portfolio carbon footprint tools can provide “a false comfort blanket for investors” if they are not properly understood, according to fund manager Schroders. “They are not the best gauge of the significant business risk that exists in industries like autos or utilities where there is significant change ahead,” writes Simon Webber, Lead Portfolio Manager, Global and International Equities. And he reckons, in the latest issue of the firm’s ‘Talking Point’ series, that they aren’t the best pointer to those companies that are enabling the transition to a low carbon economy.
Sustainalytics, the ESG research outfit, has published a new report called Fossil Fuel Divestment—A Shareholder Perspective, which summarizes various approaches to fossil fuel divestment and explores how large investors are operationalizing their commitments. The report also looks at the extent to which the shareholders of the world’s 10 largest oil, gas and coal companies are strategically aware of carbon management and divestment risks.
US SRI firm Trillium Asset Management says it recently engaged MSCI ESG Research to analyze the carbon-related characteristics of its Sustainable Opportunities Strategy, in comparison to a portfolio replicating a market benchmark. In addition to assessing the carbon footprint of the Strategy as of September 30, 2015, the MSCI analysis also “leverages an extensive set of carbon risk management and exposure metrics, from fossil fuel reserves to clean technology investments”, Trillium says.
Social
The transition of the Association for Sustainable & Responsible Investment in Asia (ASrIA) into the Principles for Responsible Investment (PRI) is “close to completion” according to ASrIA’s CEO Jessica Robinson – who added the association’s staff are now working within the PRI. The two said in October that ASrIA would join the PRI.
ESG Research Associates (ESG RA), an association of Australian pension funds, fund managers and asset consultants, will become a working group of the Responsible Investment Association Australasia (RIAA), according to the Sustainability Report. According to the RIAA, ESG RA has been concerned with increasing “the amount and quality” of stockbroker research that considers ESG issues. It is currently chaired by Rob Fowler from HESTA Super Fund and, together with HESTA, has 40 institutions as members, the RIAA said.h6. Governance
The ‘Aiming for A’ investor coalition, which secured successful shareholder resolutions at BP and Shell, has confirmed it is calling for mining giants Anglo American, Glencore and Rio Tinto, to make a “step change” in their climate change disclosure to investors. The coalition, which has £230bn assets under management and includes the Local Authority Pension Fund Forum, the largest members of the Church Investors Group, together with Hermes Investment Management, Sarasin & Partners, The Pensions Trust and Rathbone Greenbank Investments, are planning to submit shareholder resolutions later this month, which are being co-filed by a much wider group of institutional investors representing trillions in assets. These include some of the UK’s largest pension schemes such as Railpen and the Universities Superannuation Scheme, and asset managers including Aviva Investors, Amundi, BNP Paribas Investment Partners, Schroders, and APG Asset Management. The resolutions will be filed by December 31 for next spring’s AGMs.
The Sustainability Accounting Standards Board (SASB), the US not-for-profit group, has issued provisional standards for six industries in the Renewable Resources & Alternative Energy sector: Biofuels, Forestry & Logging, Fuel Cells & Industrial Batteries, Pulp & Paper Products, Solar Energy, and Wind Energy. The standards are designed to guide the disclosure of material sustainability information in standard SEC filings, such as the Form 10-K and 20-F. Link|d37f1c96-c087-49cc-b8cf-be4cde873bcc
The Financial Conduct Authority, the UK regulator, has fined Threadneedle Asset Management Limited just over £6m for failing to put in place adequate controls in the fixed income area of its front office, and for providing inaccurate information to the regulator and for failing to correct the inaccurate representation for four months.
There’s a “particular focus” on the growing interest of institutional investors in board composition and performance in the latest edition (the 30th) of the Spencer Stuart U.S. Board Index from the executive search firm. It continues the tradition of examining the latest data and trends in board composition, board practices and director compensation among S&P 500 companies. It found a “continued low turnover” in board seats and fewer first time directors. Women joined boards at roughly the same level, it also found.
A new research report has revealed that factory farming presents potentially enormous financial risks to investors. The report shows that 70% of the world’s farmed animals are now factory farmed, and that this growing sector is exposed to 28 environmental, social and governance (ESG) risks. The report is produced by the investor-led Farm Animal Investment Risk & Return (FAIRR) Initiative. The FAIRR Initiative which produced the research, launched in June this year and reports that it already has signatories managing over $440bn of assets as part of its network. Link
MetLife, the New York-listed insurance giant, says in a filing that its board has changed its by-laws to implement stockholder proxy access, under which a shareholder, or a group of up to 20 shareholders, owning 3% or more of its stock continuously for at least three years, can nominate two people to its board.
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