RI ESG Briefing, January 21: Principles for Responsible Investment surveys signatories

The latest environmental, social and governance news

Environmental

The Church of England is reportedly unlikely to respond to calls for it to divest from energy firms. A Reuters report cited the church’s Ethical Investment Advisory Group (EIAG) as saying ahead of a vote on the matter at the General Synod next month that there are financial risks in excluding sectors of the market from investment. It would mean that more than 14% of the UK’s FTSE350 index would be excluded, in addition to the existing 12.5% barred on ethical grounds, EIAG Deputy Chairman Richard Burridge was quoted saying.

UniCredit, the Italian banking group, has acquired a 7.14% stake – worth €50m – in ERG Renew, Italy’s largest wind energy producer. Genoa-based ERG has an installed capacity of 1,087 MW and a 13% market share.
Shareholders in Emerson Electric will once again vote on a shareholder motion from Walden Asset Management demanding that the US engineering firm improve its sustainability reporting at the firm’s annual general meeting (AGM) on February 4. The motion would have Emerson publish on its website a summary of its environmental, social and governance (ESG) performance by September 2014. Walden is interested in Emerson’s greenhouse gas emissions. A similar motion was already voted down during each of the company’s last four AGMs.

Social

The Calvert Foundation, the $180m foundation founded by fund firm Calvert Investments, has tapped MicroVest Capital Management as primary strategic investment advisor for its $50m microfinance portfolio. The partnership builds on more than nine years of collaboration between the two organizations and means the foundation will be able to reduce its operating expenses. Under the deal, Washington-based investment advisor MicroVest will monitor and service the foundation’s existing microfinance loan portfolio. And as the foundation’s existing microfinance loans mature and repay, it will redeploy the capital into MicroVest funds. MicroVest has around $222m under management.

Public-sector pension funds in Scotland are funding “drone attacks, big tobacco and pollution” according to an investigative report by the Sunday Herald newspaper. It used Freedom of Information requests to uncover the investments, it said. The full report is available here. Governance

The Principles for Responsible Investment (PRI), is seeking feedback from its signatories on “the events, products and services” that it currently offers – as well as “direction as to how we can serve signatories better”. The online survey is being administered by Right Lane Consulting, and will take less than 10 minutes to complete. The poll will maintain the anonymity of individual responses, the PRI said.

The Ontario Securities Commission, the Canadian regulator, has published (for a 90-day comment period) proposed rule amendments that would require Toronto-listed companies to provide disclosure on a range of issues. These include: director term limits; policies regarding the representation of women on the board/executive positions; targets on female directors/executives. “Our proposed amendments are intended to encourage more effective boards and better corporate decision making, which will benefit investors and the capital markets,” the OSC said. The amendments follow a consultation in 2013.

German exchange chief Joachim Faber has called for funded pension schemes to boost long-term investment. The development of funded pension schemes would help create a “long-term capital market culture” in Germany, said Faber, the former head of Allianz Global Investments who chairs the Supervisory Board of exchange operator Deutsche Börse. It was important to get long-term investors on the capital market – “and in so doing, also the long term-focused real economy.” He was speaking at a Deutsche Börse reception in Frankfurt.

GMI Ratings, the US governance researcher, says its Litigation Risk Model highlighted 51% of the companies that had federal class actions filed against them in the US in 2013. The companies were classified in the lowest quintile of the model a year before the lawsuit was filed, GMI said.

The Canadian Society of Corporate Secretaries is inviting participation in its 2014 Corporate Governance Practices Study for the Mining Industry. This year participants from the mining industry will gain access to a special report specific to the mining sector. The deadline for submitting responses is January 24.