RI ESG Briefing, March 31: France’s ERAFP targeted by Naomi Klein divestment campaign

Environmental

Naomi Klein, the author, and Bill McKibben, the environmentalist, have written to Anne Hidalgo, the mayor of Paris, asking her to divest the city’s treasury and employee pension investments from fossil fuel companies. The campaign to ‘divest Paris’ was launched on 350.org, the environmental NGO. The pension funds targeted include ERAFP, the €20bn fund, Ircantec, the €8bn scheme and the CNRACL, La Caisse Nationale de Retraites des Agents des Collectivités Locales for local civil servants. On Monday this week, the Paris council, the body that oversees the mayoral office, adopted a motion from the French Green Party that commits the city to combat investments that contribute to climate change. It agreed to look at the investments of two funds, the complimentary pension fund of the Paris counsellors, and a new public cultural fund for Paris created in February this year.

Environmental data body CDP (the former Carbon Disclosure Project) says “an unprecedented number” of investors are now backing its environmental disclosure system. From 2015, 822 institutional investors with assets of $95trn are requesting that 5,850 companies disclose via CDP. The organisation is also inviting companies to go beyond this and “speak out” for a universal climate agreement ahead of the UN Climate Change Conference in Paris in December – and so far 60 have committed to one or more of the six initiatives that CDP is supporting. “CDP is crucial in assessing the CO2 intensity and consequently the risk profile of company. Hence Union Investment declines to grant formal discharge to the supervisory and management boards of large companies that do not disclose to CDP,” said Ingo Speich, Senior Fund Manager at Germany-based fund manager Union Investment.

A group of 17 Anglican bishops and archbishops have called for a review of the church’s investment practices “with a view to supporting environmental sustainability and justice” by divesting from fossil fuel industries. “We call for the strengthening of ethical investment guidelines to include consideration of justice for the non-human creation as well as the interests of future generations of humanity,” they write in an open letter to the Guardian.

People

Bennett Freeman, Senior Vice President, Sustainability Research and Policy at Calvert Investments, is leaving the firm on April 30 after nine years leading the US SRI specialist’s environmental, social and governance analysis, shareholder advocacy and public policy initiatives. “It has been a privilege to work with a great team at Calvert and with companies, other investors and NGO allies to use the power of responsible investment to advance corporate responsibility and sustainability on some of the toughest issues around the world,” Freeman said. He added he would continue to work at the “intersection of multinational corporations, responsible investors, NGOs, governments and international institutions” and that he was planning to consult and serve on a number of NGO boards. He will be available via this email address.

Social

What’s claimed to be the first bond financing student housing in Germany has been launched by Deutsche Real Estate Funds, the specialist property investor, via its Deutscher Studenten Wohn Bond I SA vehicle. The five-year €80m bond will list on the Frankfurt Stock Exchange and has a coupon rate of 4.375%. The issue proceeds will be used exclusively to acquire and renovate up to eight student accommodation complexes in five German university cities.h6. Governance

Norges Bank Investment Management (NBIM), which manages Norway’s giant Government Pension Fund Global, has refuted a newspaper report claiming it has consciously sought to conceal investments in companies registered in so-called secrecy jurisdictions. NBIM was responding to a report in Norwegian business daily Dagens Næringsliv, and said it reports annually on all its holdings, and that this year it has expanded its reporting with “more detailed and more consistent information than before”. The article had claimed the fund had increased its use of “tax havens”, which it denies.

Sustainalytics, the environmental, social and governance research house, has launched the first products – Corporate Governance Insights and Corporate Governance Company Reports – within its new corporate governance research and ratings product suite for global asset owners and asset managers. The offerings are based on six governance issue areas, including board integrity and performance, board structure, shareholder rights, remuneration, financial reporting, and are underpinned by some 50 material corporate governance indicators. In late 2015, Sustainalytics will introduce its Corporate Governance Risk Radar a “heat map-based” signaling product for screening, portfolio monitoring, and benchmarking.

S&P Dow Jones Indices has unveiled a new European ethical index, the DJSI Ethical Europe Low Volatility Index, which it has licensed to Commerzbank. It measures the performance of the 50 least volatile stocks within the Dow Jones Sustainability Europe excluding Alcohol, Tobacco, Gambling, Armaments & Firearms and Adult Entertainment Index. Constituents are weighted relative to their corresponding volatility, with the least volatile stocks receiving the highest weights. “The DJSI Ethical Europe Low Volatility Index has shown a better historical performance and a lower volatility compared to traditional benchmarks, providing a cost efficient derivative exposure,” said Raphael Rollin, Equity Derivatives Product Engineering, at Commerzbank, noting a “growing demand” for sustainable and ethical investments from clients worldwide.

Romania: the Bucharest Stock Exchange (BVB) has become the latest exchange to join the United Nations Sustainable Stock Exchanges (SSE) initiative, which promotes ESG issues at stock exchanges. The initiative is co-convened by the UN- supported Principles for Responsible Investment, the United Nations Conference on Trade and Development (UNCTAD), the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact. BVB is the 19th member to join the initiative and the fourth European exchange alongside Deutsche Borse, London Stock Exchange and Warsaw Stock Exchange.

Sustainable investment boutique RobecoSAM has launched its annual Dow Jones Sustainability Indices company evaluation. The Corporate Sustainability Assessment (CSA) serves as the basis for the construction of all Dow Jones Sustainability Indices. Each year, RobecoSAM invites over 3,400 of the largest companies to participate in the CSA. Following the assessment, companies whose sustainability performance ranks them among the top 10% in their industry are selected for the DJSI World.

The row over a boardroom shake-up at UK fund manager and sustainability advocate Alliance Trust has escalated, according to reports. Alliance Trust, headed by Katherine Garrett-Cox, is under pressure from New York-based hedge fund Elliott Advisors. In the latest development, Elliott has rejected the trust’s defence of its performance, costs and dividend policy and repeated its demand for three new directors to be elected, according to a Reuters report.