RI ESG Briefing, May 2: $823bn mutual fund giant Franklin Templeton signs up to PRI

The round-up of environmental, social and governance news

Environmental

South Africa’s Treasury has published an updated carbon tax policy paper called Reducing greenhouse gas emissions and facilitating the transition to a green economy for public comment. It’s the second and final round of comments requested on carbon tax policy, before the government publishes draft legislation on carbon taxes later this year for implementation from January 1 2015.

The New Zealand Superannuation Fund has sold a portfolio of 11 forestry blocks in New Zealand’s North Island for an undisclosed price. The sales would enable the NZ$22bn (€14bn) fund “to focus on other domestic and international investment opportunities”. The majority buyer is China National Forest Products Trading Corporation, which is part of the state-owned China Forestry Group. Following the sale, the fund’s New Zealand timber investments will still exceed NZ$1bn, including its stake in the 178,000-hectare Kaingaroa Forest.

A new report from the House of Lord’s, the UK’s upper house of Parliament, has called for European authorities to “work urgently with investors, including pension funds” to ensure their awareness of climate change investment opportunities, to identify obstacles and potential solutions, such as the instruments to “allow the pooling of resources” to mitigate risk and encourage investment. The report is called No Country is an Energy Island: Securing Investment for the EU’s Future.

Social

The $261bn (€199.5bn) pensions giant, the California Public Employees’ Retirement System (CalPERS), will implement measures to improve the sustainability of its Lincoln Plaza headquarters. In preparation for the re-certification of the complex through the US Green Building Commission’s Leadership in Energy and Environmental Design (LEED), a survey concluded that “the use of electricity is our single largest opportunity for improvement”, said Deputy Executive for Operations and Technology Douglas Hoffner. CalPERS is currently considering a variety of proposed no-cost and capital intensive measures to become more energy efficient.h6. Governance

Franklin Templeton Investments, the venerable US mutual fund giant with $823bn under management, has become a signatory to the Principles for Responsible Investment (PRI). The New York-listed company was founded in 1947 and offers over 200 different open-ended mutual funds and seven closed-end funds, including the world’s largest equity fund, the $29.5bn Templeton Growth Fund. “Franklin Templeton’s various investment teams and strategies are very much aligned with the PRI principles,” said Wylie Tollette, the firm’s Director of Performance Analysis and Investment Risk. “We reviewed the Principles with each of our investment teams and added dedicated ESG resources to our Investment Risk team.” Signing up to the PRI was “a natural extension” of its existing ESG investing practices and risk management approach.

US sustainable investors the First Affirmative Financial Network and Calvert Investment Management have rebutted Nasdaq-listed watch and accessory firm Fossil’s opposition to their shareholder motion on supply chain water risks. “Fossil does not seem to understand the strategic significance of water risk and pollution in the supply chain,” they write in a letter to fellow shareholders ahead of the company’s annual meeting on May 22.

Shareholders in London-listed miner Randgold Resources reportedly rebelled against a $4m share award for CEO Mark Bristow at the firm’s AGM this week. “This excessive award serves only to reward for the continued normal operation of the company, and therefore falls far short of best practice,” governance group PIRC said before the meeting.

Investment consultants Towers Watson reportedly says there has been an average of 91% shareholder support for executive compensation ‘say-on-pay’ votes at US annual meetings so far this year – up from 89% in all of 2012. Pensions & Investment was quoting a study of 333 companies in the Russell 3000 index.

Thailand: the Corporate Social Responsibility Institute (CSRI), under the Stock Exchange of Thailand (SET), is calling for corporate sustainability reporting from domestic firms, according to a report in The Nation citing SET executive vice president and CSRI director Bordin Unakul.