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RI ESG Briefing, Oct. 14: Morgan Stanley hires ex-IFC executive for impact investing role

The round-up of the latest environmental, social and governance news

Environmental

The Anglian Diocese of Perth and its counterpart in Canberra have announced their decisions to divest from coal, oil and gas companies. It follows a recommendation from the general synod of the Anglican Church of Australia for all dioceses to review the ecological sustainability of their investments. The past few weeks have seen a groundswell in divestment commitments, including the Australian National University, Melbourne’s Moreland City Council, $8bn super fund Local Government Super and Glasgow University.

Amundi Asset Management, the World Pension Council and Blackrock are among a group of institutional investors who have joined the World Bank Group’s new Global Infrastructure Facility aimed at unlocking billions in dollars for infrastructure in the developing world. World Bank Group President Jim Yong Kim said the presence of a broad range of institutional investors at the signing to launch the GIF sent a powerful message, with the most recent data showing that private infrastructure investment in emerging markets and developing economies dropped from US$186bn in 2012 to $150bn last year.

Swedish real estate services company Fastighets AB Förvaltaren, which is owned by the municipality of Sundbyberg in Stockholm has issued its first green bond. The bond is SEK400m (€43.6m) with a five-year duration. S&P rated the issue AA-. SEB was the book runner for the transaction. Finance raised from the bond will be used for building projects that must meet a recognized green building standard. Link

Social

Morgan Stanley has appointed David Wilton to its Morgan Stanley Alternative Investment Partners (AIP) business as a Managing Director with a focus on private equity impact investing. Wilton was formerly chief investment officer and manager of the International Finance Corporation’s private equity arm. AIP will develop a private equity impact investing program in partnership with the Morgan Stanley Institute for Sustainable Investing, which seeks to drive private capital toward investments promoting sustainable and profitable economic growth. He previously worked in the World Bank Pension Fund. Announcement

German ESG research firm Oekom and the Association of German Foundations (BDS) have released a guide for the BDS’ members on how to integrate sustainability factors when investing. It includes five steps to integrate social, environmental and cultural factors when investing in companies. Corporate governance was not mentioned as a criterion. Spokesman Rolf Häßler said the purpose of the guide was to help German foundations overcome their scepticism about sustainable investing so that they could appreciate its benefits. The BDS has around 3,900 members which together manage €75bn in assets.h6. Governance

The New York City Comptroller, Calvert Investment Management and F&C Investments are among a group of investors with more than $300bn in assets under management who are strongly urging the US Environmental Protection Agency (EPA) administrator Gina McCarthy to bring forward efforts to regulate methane emissions from the oil and gas industry. In a letter to the EPA, investors warn that methane emissions are a serious climate problem, but there are cost effective solutions to cut emissions, and that a methane policy can reduce risk and create value for investors and the economy.

Shareholders and interested stakeholders have a responsibility to make it known that boardroom gender diversity “is important, that they want more information on what is being done to promote diversity, and, if not enough is being done, what actions they expect to be taken”. Those are the words of SEC Chair Mary Jo White in a recent speech. She added: “There are a number of different avenues to make these views known – from direct engagement with public companies to shareholder proposals asking a company to establish more specific policies and commitments — and I encourage you to use all of them.”

Newton Investment Management is to extend its backing of Cambridge University’s research into long-term investing for five more years. Newton has been a long-term supporter of the Centre for Endowment Asset Management at Cambridge University Judge Business School. Helena Morrissey, Newton chief executive, said: “We share the centre’s commitment to helping long-horizon investors make appropriate investment decisions. We look forward to collaborating with Professor Elroy Dimson and his team, and furthering the understanding of investment decisions and their impact on institutional returns. This underlines our commitment to the not-for-profit and charities sector.”

Employees at new investment firm Point72 Asset Management will be financially rewarded for demonstrating ethical behavior, its founder, billionaire, Steven A. Cohen has said. According to Bloomberg, Connecticut-based Point 72 will reward staff an extra bonus as much as 4% of compensation if they demonstrate adherence to the firm’s compliance policy and ethical standards, contributions to the community and repeated strong investment performance. Cohen’s hedge fund SAC Capital Advisers shut down this year to settle insider trading charges.

FESE, the Federation of European Securities Exchanges, which represents 38 exchanges in 30 countries, has published a ‘Blueprint for European Capital Markets’. “In the paper we emphasise that a greater focus is required on the end-users of capital markets,” FESE says – and calls for a “fundamental re-orientation” of Europe’s policies towards investing in economic growth, serving investors and companies and positioning Europe. Its recommendations, it says, will reduce frictional costs between issuers and investors, making “financing cheaper and returns higher”.