RI Global news round-up 08/01/08

RI’s bite-sized report of the world’s major responsible investment stories

PGGM, the €88bn Dutch pension fund for healthcare workers, has appointed a high-ranking ethical advisory committee including a Dutch politician and senior human rights academics to oversee its increasing commitment to responsible investment. The new advisers are Rein Willems, a Christian Democrat member of the lower house of the Netherlands Parliament, who until recently served as president of Shell Nederland, Cees Flinterman, honorary professor of human rights at Utrecht University, and Cees Homan, who has held posts including that of senior research fellow at the Clingendael Institute, the Dutch institute of international relations. Else Bos, chief executive at PGGM Investments, said: “We welcome the appointment of these prominent experts on climate change, human rights and the arms industry; three themes that are very important to us. They will help us to implement the ethical aspects of our responsible investment policy.” The ethical advisers will advise PGGM’s Board of Governors in developing and implementing the fund’s investment exclusion and engagement policy and will assess the ethical aspects of investment proposals. PGGM is increasing its five-strong, in-house responsible investment team to about eight members and will make further recruitments in the coming months. The fund recently hired Alex van der Velden, former executive director of FairPensions, the UK lobby group for responsible investing, as a responsible investment director in charge of portfolio assets.
The United Nations Environment Programme Finance Initiative (UNEP FI) has elected Rob Tacon, London-based head of risk reporting at Standard Chartered, as its chair for the coming two-year period.
UNEP FI is a global partnership between the UN and more than 160 financial institutions, including banks, insurers and fund managers, to understand the impacts of environmental and social considerations on financial performance.
The Carbon Disclosure Project (CDP) is inviting investors to participate in its sixth survey of the carbon emissions of the world’s largest 2,800 companies, which will be sent out on February 1. The service is free of charge and gives participants access to all responses received, including those not authorised to be made publicly available. DS – The Carbon Disclosure Project (CDP), a global standardised mechanism by which companies report their greenhouse gas emissions to their investors, recently announced it was expanding to include the Netherlands.
The CDP said investor participation should be confirmed no later than Friday, 18 January 2008 by contacting info@cdproject.net
EEA, the London-based specialist environmental fund manager founded by Simon Shaw, former investment funds director at Clerical Medical Investment Management, has opened a US office to support its expanding investment activities in North and South America. The Washington, DC base will be run by

Ricardo Nogueira, who moves to the US from London. Nogeuira will advise on the investments of Trading Emissions, EEA’s carbon subsidiary, and Leaf Clean Energy Company, its AIM-listed renewable energy investment company. The EEA Group was set up in 2003 and has approximately £850m in assets under management.
US President George Bush has signed legislation that allows pension and mutual funds to divest from companies doing business in Sudan without having to worry about subsequent legal action. US public pension funds have already pulled assets worth hundreds of millions of dollars from companies operating in Sudan as a result of state-led political decisions.
The US House of Representatives unanimously passed the “Sudan Accountability and Divestment Act” and is expected to require publication of a list of sanctioned companies, which could lead other US states to push their public pension funds to divest from the named companies.
The US State of New Jersey has passed legislation prohibiting the state’s pension funds from investing in foreign companies doing business in Iran. States with similar legislation pending include Georgia, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Texas. Californian pension fund giants, Calpers and Calstrs have said they will have to sell combined assets of $3.4bn (€2.4bn) if companies they hold stock in don’t halt their operations in Iran, after the state approved similar legislation.
US class action lawsuits over securities fraud against financial services companies more thanquadrupled to 47 during 2007 against 11 in 2006 with almost half of the cases involving sub-prime mortgages, according to a report by the Stanford University Law School Securities Class Action Clearinghouse and Cornerstone Research. Total securities fraud class actions jumped by 43% in 2007 compared to 2006, with a total of 166 companies being sued.
However, the Stanford University report said the number of class actions in 2007 was 14% below its 10-year historical average of 194 companies sued per year.
UK trades unions have called off planned strikes at UK airports, including Heathrow and Gatwick, after BAA, the airport owners reversed a decision to close the final salary pension scheme to new entrants. BAA has also agreed not to make any changes to the pension scheme in future without consultation,
Almost a quarter of Norway’s companies have reportedly failed to comply with a controversial law requiring them to increase the proportion of women on their boards to 40%, according to Norwegian government figures released in December, reports UK newspaper the Guardian. Norway’s 487 public limited companies, including 175 firms listed on the Oslo stock
exchange, had until the end of 2007 to implement a 2003 act requiring companies to boost the number of female directors or face the threat of closure. The law, which introduced quotas, has been effective in raising the number of women board members at listed companies from 6% in 2001 to 37%. Norway now boasts the highest proportion of women on boards in the world. Sweden comes second with 19%; the US has around 15% and the UK 11%.

Standard & Poor’s has launched an index for investors seeking exposure to environmentally responsible investment strategies.
It said the new Global Eco Index provided diversified, liquid exposure to 30 of the largest publicly listed companies operating in ecology-related industries including clean energy production, water utilities and infrastructure, timber, environmental services and waste management. The index covers 12 countries including Brazil, Canada, Denmark, France, Germany, the United Kingdom, Hong Kong, Japan, Norway, Spain, Switzerland and the United States. Steven Goldin, Standard & Poor’s vice president for portfolio services said: “Investors the world over have come to understand that climate change and environmental responsibility are pressing issues that may present significant investment risks and opportunities.William Hunt has stepped down as president and chief executive of State Street Global Advisors (SSGA) amidst legal threats from investors over poor performance regarding fixed income investments related to sub-prime mortgage exposure. The US fund manager said it had set aside a reserve fund worth $618m on a pre-tax basis “to address legal exposure and other costs associated with the underperformance of certain active fixed-income strategies”. James Phalen, head of international investment operations, has been named as interim CEO. Ron Logue, chairman of State Street Corporation, said: “Some of our customers that were invested in the active fixed-income strategies have raised concerns that we intend to address. Nevertheless, we will continue to defend ourselves vigorously against inappropriate claims, including those that seek recovery of investment losses arising solely from changes in market conditions.”