RI ESG Briefing, Nov. 4: CalPERS says financial crisis settlements reach $500m

The round-up of the latest ESG news


The Australian government has suggested that it will ignore a motion from the Senate calling on the country’s Future Fund to disclose its analysis of carbon and climate risks in its investment portfolio through the Asset Owners Disclosure Project by 24 November 2014. Leader of the Greens Senator Christine Milne successfully tabled the motion last week, but Senator Mitch Fifield, who manages government business in the Senate, has said it is not in support of the motion, the Future Fund has not participated in AODP surveys in previous years, and that the fund incorporates ESG in its investment decision-making.

The Basel Committee, which oversees the ‘Basel III capital accord, should explicitly acknowledge environmental risks and their increasing impact on the stability and sustainability of the economy as an emerging source of systemic risk for banks and banking stability. That’s one of the findings of a study called Stability and Sustainability in Banking Reform: Are Environmental Risks Missing in Basel III? by Professor Kern Alexander, Fellow of the Cambridge Institute for Sustainability Leadership (CISL) and Chair in Law and Finance at the University of Zurich.

Allianz Global Investors (AGI) says AREF, its renewable energy fund for institutional investors, has acquired another nine onshore wind parks in Germany from DIF, an Amsterdam-based infrastructure investor. Financial details were not disclosed. The wind parks have a combined capacity of 57MW and are located in the German States of Saxony-Anhalt, Saxony, Hesse, Brandenburg and Mecklenburg-Western Pomerania. AREF was closed to new investment a year ago after taking in €150m in assets from institutions, including AGI’s parent Allianz. Link (German)


To mark its 25th anniversary, the Ecumenical Council for Corporate Responsibility (ECCR), the church investor advocacy coalition, has released a report ‘Using Ethical Investment to Close the Gap’, a radical call to action for the investor community to use their ownership responsibilities to address ever increasing levels of wealth inequality in the UK. Executive Director John Arnold said: “For too long investors have presided over a corporate system that over-rewards the elite whilst leaving many employees at poverty level. We want individual and institutional investors to join their church investor colleagues, and revisit their responsibilities, as owners of businesses, to challenge companies to tackle low pay and insecure work.” Home page

Campaign group Publish What You Pay (PWYP) and UN Women have launched a gender guide for natural resource management. The 15-page Extracting Equality – A Guide, written by PWYP and UN Women along with experts working on gender and the extractives worldwide, is the first combine gender with good governance in the sector, it’s claimed.h6. Governance

California pension giant CalPERS has received $249.3m (€199m) in damages from Bank of America as a result of legal settlement between the bank and Kamala Harris, the State’s Attorney General. The bank had been under investigation for allegedly misrepresenting mortgage-backed securities it sold to investors in the run-up to the financial crisis. Last September, CalPERS collected $88m from Citigroup under similar circumstances and says that in total, it has recovered $500m relating to MBS losses. “We’re glad that those who misled investors about the risks of mortgage-backed securities continue to compensate our members for their losses,” said the fund’s CEO Anne Stausboll.

UK Business Secretary Vince Cable is reportedly about to launch a push to get more ethnic minorities onto the boards of FTSE 1000 companies, with the aim of eventually having one in every five directors from a non-white background. The Guardian said the move to advance more black, Asian and other minority representation into senior management roles follows a successful push to get more female directors at large firms.

The European capital markets industry risks losing its competitive edge if it doesn’t embrace the importance of gender diversity at the top level, according to a new report. Think tank New Financial – founded by former Financial News Editor William Wright – has taken a snapshot of female representation on boards and executive committees at 220 organisations across 11 sectors in the financial markets – with what it says are “some predictably depressing results”. Counting every woman: gender diversity in the capital markets was written by Yasmine Chinwala.

The Governance Institute of Australia, the independent professional association, has published a new 36-page discussion paper on ‘shareholder primacy’. It debates the issue of whether shareholder interests are paramount in corporate decision-making. ‘Shareholder primacy: Is there a need for change? Is available here.

Consulting firm KPMG has launched a new guide to materiality assessment for sustainability reporting. The publication aims to help corporate reporting and risk professionals implement a “robust and practical process” for identifying the social, environmental and governance topics that matter most to a business and its stakeholders. Wim Bartels, KPMG’s Global Head of Sustainability Reporting and Assurance, said: “We believe that companies that integrate the sustainability materiality process with the enterprise risk management process are in a better position to inform investors and other stakeholders about their sustainability impacts, risks and opportunities.” Link