RI ESG Briefing, Feb. 24: Pearson facing shareholder proposal from UK, US union pension funds

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

Environmental

The Climate Disclosure Standards Board (CDSB), an international consortium of business and environmental NGOs committed to equate natural capital with financial capital, and Oxford University’s Said Business School, have reviewed FTSE 350 listed companies, looking at the disclosure of environmental information in the annual reports. The paper proposes steps for regulators to enable greater disclosure of environmental information. This comes after the implementation of mandatory greenhouse gas reporting in the UK.

Impax Asset Management, the UK-based environmental specialist, published this month a paper directed at investors arguing for the case of investments in EU renewables. For Impax, investment in renewables is a win-win case, as it implies ‘no carbon emissions, no fuel costs and strong drivers for continued growth’. The paper also lists the opportunities for the EU power market for 2016-2020. Impax sees onshore Wind and Solar as the most interesting and accessible investments available in Europe. It also reviews over technologies to provide a broader overview of the sector.

Nordea’s 2015 Sustainability Report introduces a new sustainability strategy. For Kritiina Oja, acting head of Sustainability, Nordea, as the biggest financial institution in the Nordics, has an important role as enablers of economic success in society. The new strategy will focus on promoting sustainable economic process, building skills in personal finance and ensuring a diverse workforce.

Social

The head of Pensioenfonds Zorg en Welzijn (PFZW), the giant Dutch pension fund for the healthcare sector, has called upon pharmaceutical companies to lower the cost of drugs. In a letter to members, Peter Borgdorrf said many of the Zeist-based investor’s assets are invested in the sector – though the high cost of drugs doesn’t follow the funds’ responsible investment principles. Borgdorrf –previously director of the Dutch Association of Industry-wide Pension Funds (the VB) – said: “The public debate on drug prices is not lost on PFZW.”

Richard Burden MP, Chair of the Britain-Palestine All-Party Group has accused Cabinet Office Minister Matthew Hancock of avoiding parliamentary scrutiny concerning the new restrictions on public sector procurement and ethical investment decisions after Hancock made the announcement on a visit in Israel instead of in the House of Commons.

The total amount of capital raised by clients of impact investment intermediary ClearlySo has surpassed £100m, the firm said. The firm, founded in 2008, said it has helped more than 75 businesses and funds, including Ethical Property Company.h6. Governance

Pearson, the UK-listed media and education group, is facing a shareholder proposal calling for its board to conduct a strategy review looking at education commercialization. The resolution has been tabled by union-linked UK and US pension funds and calls for a halt to the firm’s plans to create schools for profit in parts of the world where there are no proper state education systems. The funds include the staff pension fund of UNISON, the 1.3m-member UK public service union, and comes in the wake of what it calls “four straight profit warnings, tumbling revenue and plunging stock prices”. It’s been co-filed by the Chicago Teachers Pension Fund, Trade Union Fund Managers and 130 individual shareholders.

UCA Funds Management, the Australian ethical funds manager, has announced a further commitment to gender diversity for 2016. It intends to monitor the proportion of women on company boards in which it invests, in support of the Australian Council of Superannuation Investors (ACSI) 2015 goal to ensure women comprise 30% of all boards in the main-market ASX 200 by 2018. The firm, a social enterprise of the Uniting Church in Australia, Synod of Victoria and Tasmania, has more than A$1bn (€650m) under management. Link

Calvert Investments, the US SRI manager, says it earned top scores from the Principles for Responsible Investment for its 2015 Annual Assessment. It said: “Calvert is pleased to share its scores on the United Nations Principles for Responsible Investment’s (PRI) annual assessment, earning an A or A+ for each area, on an A-E scale.”

Campaign group ShareAction has called for the formation of an expert working group, including members of local government, pensions and investment bodies, to assist with drafting new guidance on Local Government Pension Scheme investments. “We would be delighted to be invited to contribute to a working group on this subject,” said Policy Officer Rachel Haworth, Policy Officer in a letter to the government. ShareAction is concerned by the government’s proposal to issue guidance to administering authorities stating that non-financial considerations should not result in policies which pursue “municipal boycotts, divestments and sanctions”.

Christian Aid has called for an overarching global tax body. It follows the OECD’s announcement on a new framework that would allow all interested countries and jurisdictions to join in efforts to update international tax rules. Although the NGO welcomed the move, it said that in addition to the new “expanded technical body” what was needed was “an inclusive, global agenda-setting body to respond to the priority concerns of all countries”.