RI ESG Briefing: Principles for Sustainable Insurance set for Rio+20 launch

Environmental

The Principles for Sustainable Insurance (PSI) will be launched at the Rio+20 summit in Brazil in June, according to the UN Environment Programme Finance Initiative (UNEP FI). “The Principles aim to strengthen the insurance industry’s contribution to building a resilient, inclusive and sustainable society,” said Butch Bacani, who leads the PSI Initiative at UNEP FI.

The World Wildlife Fund and the CDC and FMO development finance institutions of the UK and Netherlands have released a study into sustainable palm oil. Profitability and Sustainability in Palm Oil Production examines the financial costs and benefits of producing sustainable palm oil under the guidelines set out by the Roundtable on Sustainable Palm Oil (RSPO).

US derivatives exchange the CME Group has bought environmental markets firm GreenX Holdings for an undisclosed price. It follows a 332% increase in volumes across all contracts on GreenX in 2011. GreenX was previously owned by a consortium of the CME and banks and other firms including Credit Suisse, Goldman Sachs and Morgan Stanley. Link

The Equator Principles Association has announced a new delay to the third version of the Equator Principles (EPIII). It said the new version is expected in October 2012, although the timeline “might be subject to further extension if deemed necessary”. The Principles are a credit risk management framework for environmental and social risk in project finance.

Social

The Canadian federal government is planning to set up a new advisory council to promote women on boards. “Through the creation of an advisory council of leaders from the private and public sectors, the Government will work with the private sector to link corporations to a network of women with professional skills and experience,” it said in its budget statement.

The UK government has officially launched the £600m (€725.7m) ‘Big Society Capital’ fund to help tackle social problems. It will use cash from dormant bank accounts and the major banks to fund investment in charities and social enterprises. “Mainstream investors and trustees need to challenge received wisdom when it comes to their fiduciary responsibilities by demanding that their advisers and managers show them more social investment opportunities,” says CEO Nick O’Donohoe in a blog post.

The World Gold Council has unveiled the latest ‘exposure draft’ of its Conflict-Free Gold Standard. The objective of the standard is to create “absolute trust” that the gold produced under its guidelines neither fuels armed conflict, nor funds armed groups, nor contributes to human rights abuses associated with these conflicts. Link. Governance

Walden Asset Management says 12 US listed companies have agreed to disclose more about their political lobbying activities, according to a Reuters report citing the US fund firm’s Senior Vice President Tim Smith. In return, Walden and its co-filers will withdraw proxy proposals at companies including Coca-Cola, General Electric and Johnson & Johnson.

Just 15% of the 175 asset managers that are signed up to the UK’s Stewardship Code disclose a full voting record, according to research firm PIRC. It said using existing powers in the Companies Act to make disclosure mandatory would be an “obvious solution” for the government.

Investors can help banks by encouraging them to take on “sustainable business models based less on risk-taking” and more on careful analysis of competitive advantage and operational efficiencies, said Bank for International Settlements chief Jaime Caruana at a speech in London recently. The talk was entitled: Shareholder value and stability in banking: Is there a conflict?

There’s been a development in a mortgage-backed securities related investor lawsuit against the Bank of New York Mellon. A federal judge has rejected the bank’s attempt to dismiss a lawsuit by investors led by the $3.4bn Chicago Policemen’s Annuity and Benefit Fund. It relates to the bank’s role as trustee for securities that led to a multi-billion dollar settlement by Bank of America.

The World Economic Forum has released research looking at how the difficulties faced by long-term investors in measuring investment returns, risks and liabilities intersect with the governance of long-term investors themselves. It is called Measurement, Governance and Long-term Investing

F&C Asset Management has removed Edinburgh-based oil explorer Cairn from its Stewardship funds. “Cairn Energy has been removed from our Stewardship range of funds because of its move into Arctic drilling,” Karina Litvack, director of governance and sustainable investment at F&C, was quoted as saying by the Glasgow Herald.

The World Forum on Governance has released the final version of the Prague Declaration on Governance and Anti-Corruption, according to IPE.com. It said the declaration’s 10 principles cover bribery, personal financial disclosures and conflicts, the law enforcement system, open government, corporations, investors, campaign finance, lobbying, whistleblowers and NGOs and media.