RI ESG Briefing, December 6: Northern Trust launches custom ESG index fund

The round-up of environmental, social and governance news


The Carbon Disclosure Project is currently actively recruiting new investor signatories. “Join 655 financial institutions in addressing” risks on climate change, water and forests, the CDP says. Investors are requested to contact Marc Fox (email), the CDP’s Director of Investor Initiatives by January 21, 2013.

Norges Bank Investment Management, the manager of the NOK3.8trn (€518bn) Norwegian Global Pension Fund, has disclosed a 4.72% stake in US energy group UNS Energy Corp. UNS subsidiary company Unisource Energy Services provides users with renewable energy via solar photovoltaic technology, as well as biomass/biogas, hydroelectric, geothermal and wind. Its new Kingman facility is a 10.5MW combined wind and solar PV system that could power over 2,200 homes.

Reinsurance giant Munich Re says it has become the first insurance group to offer serial loss cover for offshore wind energy. Board member Thomas Blunck said: “With innovative solutions like this serial loss cover, we create investor security and help new technologies for the production of renewable energy gain a foothold in the market.” Link


A private members bill tabled by New Zealand Green Party co-leader Russel Norman that would require the N$20.2bn (€12.9bn) Superannuation Fund to consider sustainability and climate change when investing has been defeated in parliament, according to local media reports. Norman had cited the giant Norwegian Global Pension Fund as an example of a state fund with strong responsible investment guidelines.

A group of senior figures has called for all organisations – corporations, governments, and multilateral organizations like the UN – to manage their pension assets in a way consistent with their rhetoric on sustainability. The plea comes from SAM Chief Executive Michael Baldinger and Robert Eccles and George Serafeim of Harvard University in a recent opinion piece. Unless this happens, they argue, the sustainability movement will lag behind its potential.

Breckinridge Capital Advisors, the Boston-based fixed income house with $17.5bn under management, has developed an in-house ‘Sustainability Modeling Framework’ that rates corporate and municipal bonds. It uses data from MSCI, Bloomberg, and Sustainalytics to help it evaluate extra-financial ESG factors.h6. Governance

Northern Trust, the Chicago-based finance giant with $4.8trn (€3.7trn) in assets under custody and $749.7bn under management, has launched the Northern Trust World Custom ESG Equity Index Fund. It is based on six criteria (environment, human rights, anti-corruption, labour and supply chain, tobacco suppliers/producers, and controversial/indiscriminate weapons). “Through the launch of this fund, we are able to respond to the most important ESG themes identified by our clients, and include the benefits associated with a pooled fund structure,” said John Krieg, managing director of Northern Trust asset management in Europe, Middle East and Africa. The fund is structured as a tax-transparent Common Contractual Fund (CCF). Northern Trust, which manages some $17bn in socially screened portfolios, earlier this year announced a partnership with MSCI on ESG.

A group of 40 sustainable, responsible, and faith-based investors have written to the US Securities and Exchange Commission (SEC) to express opposition to a lawsuit filed by business groups. The US Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable seek to set aside the SEC’s recently issued Rule on Conflict Minerals. The letter was coordinated by the Responsible Sourcing Network, Boston Common Asset Management, Calvert Investments and the US SIF, the Forum for Sustainable and Responsible Investment.

Standard Life Investments (SLI), the global investment manager, says it will now disclose how it votes at company meetings within two weeks of the relevant month end, instead of the current disclosure which is three months in arrears. SLI said the move is “in line with our desire to be more open and accountable to our clients and to meet industry best-practice standards”. It was also indicative of increased client interest.

Oil giant Shell recently held a field visit for socially responsible investors in Port Harcourt, Nigeria. During the visit, shareholders were given presentations on the flare reduction program, its response to the UN Environment Programme (UNEP) report on contamination in Ogoniland and illegal bunkering. The presentations are available here

The Global Reporting Initiative (GRI) will close its Material Sustainability Topic Research on December 14 – so there’s just one week to go to get your submission in. In May next year the GRI aims to publish a list of internationally recognized material topics for business/industry activity groups, to be used as a reference in the sustainability-reporting field. Link