RI ESG Briefing, October 26: Ethos, Arjuna, SAUL, West Midlands, RepRisk, ICCR

Environmental

Ethos, the Swiss pension fund-backed governance outfit, has published an Engagement Paper addressed at listed companies which summarizes investor expectations regarding climate change risk management. Despite the urgency of the issue, currently less than half of the companies listed on SIX Swiss Exchange publish their greenhouse gas emissions. It said: “Ethos, as a long-term investor in companies listed on the Swiss stock exchange, is particularly sensitive to climate change risk management. Not only will the need to contain global warming block the use of the assets of fossil fuel producers such as oil companies, but climate change will also have direct impacts on the value of all investments.”

The Superannuation Arrangements of the University of London (SAUL) is mulling carbon footprinting its €2.3bn portfolio. The body provides pensions to some 38,000 non-academic staff linked to its 21 universities and institutions – including the London School of Economics, Kings College London and Birkbeck. Chief Investment Officer Kevin Wade told RI the strategy was being considered, but no final decisions had been made yet.

Welsh renewables developer Tidal Energy is looking for new buyers as it enters administration. The firm, which was behind the UK’s first tidal energy generator in 2015, blames “economic and political uncertainty” in the country’s renewables sector the reason for its downfall, citing the UK’s recent overhaul of subsidies. Tidal Energy’s first project was funded by Welsh renewables firm Eco2 Ltd – a majority shareholder in the company – and EU funds delivered through the Welsh Government. Key staff will be retained through the administration, to enable the firm to continue its operations.

Social

RepRisk, which provides business intelligence on environmental, social, and governance (ESG) risks, has released its first Sector Benchmarking Report focusing on the Pharmaceuticals and Biotechnology sector.

Senior UK social investment figures have voiced criticism towards the government’s approach to social impact bonds to a House of Lords Select Committee. The upper house’s Committee on Charities is currently gathering evidence on the charitable sector; part of its remit is social investment and social impact bonds. In written evidence, Social Investment Business said there was “too much hype” without evidence from ministers around SIBs. Peter Holbrook, chief executive of Social Enterprise UK, while supporting SIBs, added there are other forms of finance that were as effective, cheaper and simpler. UKSIF said it was “not a given” that charity boards understand SIBs.

Advocacy group Global Woman wants to see a minimum target of 30% female board composition of companies listed on the New Zealand stock exchange (NZX), according to reports. The group included the target in a submission to the NZX’s proposed changes to corporate governance reporting requirements.h6. Governance

Arjuna Capital, the US SRI firm, has applauded eBay for a new gender pay equity study that shows women earn nearly the same as men in the US – 99.8% of the total compensation that men make in the same job and at the same grade level. Arjuna said eBay’s announcement reflects a major shift and momentum building for tech companies to improve the treatment of women in the workplace. Arjuna filed a shareholder proposal at eBay in partnership with Baldwin Brothers and co-filer Pax World Funds

The West Midlands Pension Fund in central England has filed a ‘dieselgate’-related lawsuit against Porsche Automobil Holding SE, according to IPE.com. The suit claims the car firm failed to disclose its own financial risks incurred by its subsidiary Volkswagen (VW) through installing ‘defeat device’ software in hundreds of thousands of diesel vehicles.

A group of 300 institutional investors under the Interfaith Center on Corporate Responsibility (ICCR) banner are asking 17 leading drug companies, including Johnson & Johnson, Pfizer and Merck, to be more transparent about their pricing strategies. “The health of the economy depends on the health of the people,” Donna Meyer, director of shareholder advocacy at Mercy Investment Services was quoted as saying by the Wall Street Journal. The WSJ said the investors have submitted shareholder proposals asking 11 U.S. companies to issue reports listing average annual price boosts for their top-selling drugs.

UK opposition parties Labour and the SNP have voiced strong criticism of plans to pool the assets of 89 Local Government Pension Schemes in eight different funds. In a Parliamentary debate this week, MPs did not oppose the pooling of assets necessarily, but the perception that government would want control over how the pools invested. Shadow Work and Pensions Minister Jack Dromey said it was illegitimate and potentially unlawful, and SNP Pensions Spokesperson Ian Blackford said it could risk infringing European law on government intervention in pension fund investment. Parliamentary Under-Secretary of State Marcus Jones said that government was clear that investment decisions are for administering authorities and “that will remain the case”. He added that there will be no direction for funds to invest in infrastructure. Later, under questioning from MPs, he said the pools should not pursue boycotts, divestment or sanctions unless were formal restrictions are in place by government. But also said decisions such as whether to invest in tobacco was a matter for individual pension funds.

Robeco Institutional Asset Management (Robeco) has reportedly become the latest signatory of the new Taiwan Stewardship Principles for institutional investors. In doing so, the firm is among the first global asset managers to commit to the new code, Asia Asset Management reported.