RI ESG Briefing, October 6: Institutional Investors Group on Climate Change responds to Paris agreement

The round-up of the latest ESG developments


Responding to the Paris Climate Agreement crossing the threshold required to enter it into force, Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change – a forum representing 128 big investors across nine EU countries with over €13trn in assets under management ­ said today: “Institutional investors across Europe are delighted the Paris Climate Agreement has now crossed the threshold required to gain the full force of international law before COP22 in Marrakech and so far ahead of all expectations. Investors now urge all signatories – and especially the G20 – to follow through with swift action to implement this agreement which signals so clearly that the transition to a low-carbon global economy is underway and must accelerate rapidly.”

“We need to be bolder when it comes to supporting sustainable finance and encourage institutional investors to have more sustainable investment policies” – those are the words of European Commission Vice-President Valdis Dombrovskis at the Securities Industry and Financial Markets Association (SIFMA) in New York yesterday (October 5). Dombrovskis added that the boldness should extent to “how we can support the transition to a low carbon economy in the financial sector”.

Key church investors are expected at a conference today that aims to challenge the “perceived barriers to scaling up investments in clean energy and other climate solutions”. The event is organised by the Climate Change Collaboration, Operation Noah and Quaker Peace & Social Witness. It is called “Investing sustainably: Protecting financial assets and supporting the transition to a zero-carbon future” and the keynote speaker is Bishop Richard Cheetham, Bishop of Kingston and member of the Church of England’s Environmental Working Group.


Don Blankenship, the former CEO of US mining company Massey Energy, who is serving a one-year prison sentence for violating mine safety laws, is reportedly referring to himself as a ‘political prisoner’. The Wall Street Journal said he is issuing a 67-page booklet to declare his innocence. Sixty-six-year-old Blankenship was convicted last year after a five-year investigation into the 2010 Upper Big Branch Mine disaster that killed 29 miners. “You can be sure I am fully innocent,” he is quoted writing. “The real conspiracies were the government’s coverup of the UBB truth and my prosecution.”h6. Governance

The UK’s Financial Conduct Authority regulator has published its proposed rules and guidance aimed at standardising the disclosure of asset manager transaction costs for pension funds. Current rules say independent governance committees (IGCs) (the bodies that oversee the government’s new workplace pensions) and trustees are required to request and report on transactions costs, but asset managers are not required to disclose in a standardised form. The FCA is now proposing that fund managers have a duty to disclose aggregate transaction costs to pension schemes, which could include specific costs like taxes and securities lending costs. The consultation is open until 4 January 2017. Link to the consultation.

Saker Nusseibeh, the chief executive of Hermes Investment Management, the BT Pension Scheme-owned fund firm, says new Prime Minister Theresa May is “doing a great job” speaking about corporate governance changes in the UK. “She’s saying the things that Hermes has been saying for a long time,” he told BBC radio. “You have to have a kind of capitalism that is more stakeholder-oriented than currently. And we have to have a market that is more about holistic returns than financial returns.” Asked about investors possibly being asked to ‘police’ companies, Nusseibeh said: “Quite right too. We’re the agents for the shareholders. Who are the shareholders? They’re the ordinary working men and women of the United Kingdom. They are the pensioners who ultimately own the companies and if you own a business you have absolutely every right to ask that business to behave in a responsible way.”

Ratings agency Moody’s has released a report saying sustainability is a way for asset managers to “stand out”. It said: “Moody’s research shows several asset managers have an edge as early movers. BlackRock and Amundi have demonstrated strong commitment to sustainable investing practices with clear and transparent policies, processes, communication and engagement. Standard Life Investment is building a brand name through active communication and targeted research reports.” ‘Asset Managers – Global: Sustainable Investing Strategies Give Active Managers A Means To Stand Out’ is available on Moody’s home page.

A consortium of investors including Gregory Taxin – founder of proxy firm Glass Lewis – has reportedly disclosed a 5.2% stake in SeaWorld Entertainment, the embattled marine park operator. Reuters reported that the company has faced criticism after the 2013 documentary “Blackfish” about the captivity of killer whales.