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RI ESG Briefing, March 20: Faith investor Everence expands environmental screening policy

The round-up of environmental, social and governance news

Environmental

US faith-based investor Everence and its Praxis Mutual Funds have expanded their environmental screening policy. The new environmental screen does not avoid carbon intensive industries as a whole, but comprehensively assesses the environmental impact of all companies. Everence and Praxis will examine past environmental practices, current carbon emissions and proven ability to track and manage the climate risks faced by the companies. To help implement the new policy, Everence and Praxis are working with the Intangible Value Assessment (IVA) from MSCI ESG Research.

Investment consultant Mercer is currently establishing a follow up to its pioneering 2011 Climate Change Scenarios – Implications for Strategic Asset Allocation report. The 2014 study will update the scenarios, better identify and model risk factors, undertake sector level analysis and provide a multi-year guide for near and longer term portfolio decisions. The update will follow the same collaborative global research model, with the first partners committed in multiple jurisdictions and others in different stages of due diligence. Contact Mercer for more information.

The University of Rhode Island (URI) has rejected a call to divest from the fossil-fuel industry, according to reports. URI Foundation President Michael Smith – in a letter to Fossil Free Rhode Island – argued the move could affect investment performance at the university’s $110m endowment.

Social

Social investor Oikocredit says it has recorded another set of solid results for the year ended December 31 2013. Net inflow of lendable funds reached a record of €80m, up 74% from €46m in 2012. Total investors grew to 52,000 from 48,000. Throughout the year, Oikocredit continued its strategic investments in Africa, agriculture and inclusive finance, whilst looking to develop into other sectors.

UK campaign group the Social Economy Alliance has welcomed a new 30% tax relief-rate for social investment that was announced in the Budget this week. The body, made up of more than 100 organisations, including the UK Social Investment Forum, says the measures have the potential to unlock billions and fuel the UK’s growing ‘social economy’ – social enterprises, cooperatives and trading charities.h6. Governance

A group of shareholders withdrew their ‘proxy access’ proposal at Walt Disney just prior to the entertainment giant’s annual meeting on March 18. The company cited “ongoing discussions” with the group. The investors had included Legal & General Investment Management (on behalf of Hermes Equity Ownership Services), Connecticut Retirement Plans and Trust Funds, and the California State Teachers Retirement System (CalSTRS).

The International Integrated Reporting Council (IIRC), the body promoting combined financial and sustainability reporting, has welcomed the announcement that the Integrated Reporting Committee (IRC) of South Africa has endorsed the International IR Framework. 
Companies listed on the Johannesburg Stock Exchange are now into their fourth year of Integrated Reporting.

A group of proxy advisors – the Best Practice Principles Group (BPPG) – has published a set of comply-or-explain principles for shareholder voting research. The firms (Glass Lewis, Institutional Shareholder Services, IVOX, Manifest Information Services, PIRC and Proxinvest) were responding to a consultation by the European Securities and Markets Authority (ESMA).

Hedge fund Corvex Management and real estate developer Related Fund Management have apparently succeeded in ousting the board at CommonWealth REIT [real estate investment trust], according to a report in the New York Times. Shareholders with over 81% of the stock voted to replace the entire board – meaning the likely removal of father-and-son team Barry and Adam Portnoy.

The Shareholder Rights Project (SRP) headed up by Harvard Professor Lucian Bebchuk has said that 75% of its engagements with companies so far this year have resulted in agreements to ‘declassify’ (i.e. de-stagger) boards. The SRP reckons that, by the end of 2014, there will be about 100 board declassifications by S&P 500 and Fortune 500 companies. The five SRP-represented institutional investors submitting proposals to 2014 annual meetings are the Florida State Board of Administration, the Illinois State Board of Investment, the Nathan Cummings Foundation, the North Carolina Department of State Treasurer and the Ohio Public Employees Retirement System.