RI ESG Briefing, January 13: Swiss pension fund-backed Ethos critical of Credit Suisse chief’s role at GSK

The round-up of environmental, social and governance news

Environmental

Three hundred professors at Stanford, the US university, are calling on the institution to exit all fossil fuel investments, according to reports. The Guardian cited a letter to Stanford President John Hennessy and the trustee board calling on the university to recognise the urgency of climate change and divest from all oil, coal and gas companies. Stanford, which has a $21.4bn (€18bn) endowment, eliminated direct investments in coalmining companies last May, making it the most prominent university to sever links with the firms.

Separately, the University of Hawaii’s Board of Regents committee has approved the formation of a task group to evaluate and recommend how the university can divest all its interests in fossil fuel companies, or those with the greatest carbon reserves. “The task group would also study the university’s energy reduction and broader sustainability policies and practices,” the university said. The task group would consist of members of the Board of Regents, administration, UH investment advisors, the UH Graduate Student Organization, the Associated Students of the University of Hawaii at Mānoa and DivestUH, a coalition supporting divestment from fossil fuel companies.

The European Investment Bank (EIB), the largest climate investor in the world, is organizing a public consultation next month about its climate due diligence, assessment tools, processes and procedures, the design of financial products, and on the bank’s Corporate Social Responsibility agenda and reporting. The meeting takes place in Brussels on February 12.

Social

Sweden’s four AP pension buffer funds have signed framework agreements with Eiris, Ethix SRI Advisors, GES Investment Services, Hermes Equity Ownership Services, Solaron Sustainability Services, Sustainalytics and Vigeo to deliver ESG and ethics advice. The framework agreement “does not guarantee any business”, but may lead to work with the funds’ Ethical Council or the funds separately. Link

Impact investing marketplace GATE Global Impact has been acquired by Investview, a New Jersey-based investment firm that is listed on the over-the-counter markets. The deal includes the GATEWAY 2.0 platform. Investview said: “Additionally the platform provides a complete end to end solution for both investors looking for new investment opportunities including through the GATEWAY 2.0 partnership with the United Nations Global Compact or secondary liquidity of existing investments.” Investview said industry figures Vincent Molinari and Joseph Latona would join it “to focus on the execution of Investview’s impact investing subsidiary”.h6. Governance

Dominique Biedermann, Chief Executive of Ethos, the Swiss pension fund-backed proxy firm, has criticised Urs Rohner, Chairman of Credit Suisse, for accepting a directorship at UK pharmaceuticals giant GlaxoSmithKline. According to the financial news portal finnews.ch, Biedermann said Rohner’s first priority should be supervising such a huge bank like Credit Suisse. Biedermann also said that if Ethos determined that the directorship at GlaxoSmithKline took Rohner away from his duties at Credit Suisse, it would propose at the bank’s next annual meeting that the Chairman’s salary be cut. The bank will hold that meeting on May 21. Ethos represents the shareholder interests of 150 Swiss pension funds.

The UK government has said there is “merit” in proposals to legislate for increased transparency from UK pension funds after Michael German, a Liberal Democrat member of the Lords upper house, tabled an amendment to the Pension Scheme Bill to allow pension savers to request details of voting behaviour and contracts with asset managers. The government committed to consult further on the rights proposed in the amendment, rather than vote now. Campaign group ShareAction, which has worked with Lord German on the amendment, is urging the government to commit to a timetable for consultation which avoids delaying it until after the general election.

A lawsuit brought by the SEK276bn (€29.2bn) Swedish buffer fund AP4 against US investment bank Morgan Stanley over subprime mortgages has reportedly failed, with a US appellate court upholding a lower court’s decision to throw out the suit. The New York Law Journal reports that lawyers for AP4 were not able to prove “scienter,” a legal term signifying knowledge of wrongdoing on the part of Morgan Stanley. AP4’s lawyers, the Law Journal said, had argued that their client, a shareholder in Morgan Stanley, had suffered financially because the bank’s officers misrepresented the credit risk associated with subprime mortgages between June and November 2007. The action meant that Morgan Stanley’s share price was artificially inflated during the period.

The Japanese corporate governance code is expected to enter force on June 1, according to a draft consultation on the code. The draft code, published by the Japanese Financial Services Agency (FSA), includes guidelines aimed at sustainable growth of shareholder value, ESG issues and diversity.

A webinar is taking place tomorrow (January 14) entitled “Governance Roadshows: In-House & Investor Perspectives”. Speakers for the event, organised by TheCorporateCounsel.net, include: Sarah Goller, Senior Manager, Vanguard; Michelle Edkins, Managing Director, BlackRock; Bill Ultan, Senior Managing Director, Morrow & Co.; and Susan Wolf, CEO, Global Governance Consulting. Link