Zurich-based Sustainable Asset Management (SAM) is building a new sustainable alternative investments arm focusing on hedge funds, water, renewable energy and CO2 centred investment vehicles.
SAM, part of the Robeco funds group, has appointed Reto Kuhn, former head of the Swissair pension fund to run the unit. He starts at the firm on February 1. SAM plans to launch a sustainability hedge fund, one of the first in the market, during the first half of 2008. SAM, which launched in 2005, boosted total assets under management by 50% last year to SFr15.1bn by the end of 2007 from SFr 10.2bn at the end of 2006.
ABP, the €221bn, pension fund for Dutch civil servants, has hired a dedicated researcher to examine human rights issues within the companies it invests in. The fund has appointed Anna Pot, former co-ordinator of economic relations with Amnesty International, for the position. The fund is expected to announce further hires to its growing ESG team under Rob Lake, senior portfolio manager for ESG issues at ABP.
Barclays, the UK banking group, is investing £5m into a £25m social venture capital fund launched by London-based Catalyst Fund Management & Research. The bank’s commitment is an increasing sign that investors are seeing potential in the social investment sector. Catalyst’s new fund is aimed at institutional investors seeking financial returns in sectors where backing successful businesses also generates social returns. The fund is expected to concentrate onthe burgeoning ethical consumerism sector as well as education, health, alternative energy & the environment.
In 2005, Barclays made a similar commitment to the Bridges CDV Fund II, a £75m social venture capital fund run by London-based Bridges Capital, whose board includes private equity luminaries Sir Ronald Cohen, founding partner of Apax, and Nigel Doughty, founding partner of Doughty Hanson. Investors in Bridges’ first fund, which received UK government support, included the pension funds of West Midlands and South Yorkshire councils.
A group of institutional investors running more than $2.1 trillion in assets collaborating under the United Nations Principles for Responsible Investment (UNPRI) has warned 78 listed companies they are falling short on commitments to the UN Global Compact, which aims to advance human rights, labour standards and good environmental practice in company management. The investors, led by UK fund manager, Morley, also praised a smaller group of companies for good performance in applying the Global Compact. According to the UN Global Compact compliance list, 904 companies – mostly from emerging markets – have failed to produce the updates required by the scheme. The investor group has written to the chief executives of the biggest listed companies whose reports are late, pushing them to comply.
CalPERS, the US pension fund, has reportedly backed activist fund manager Knight Vinke, in which it owns a
stake, over accusations of corporate failings and poor financial performance at HSBC. The fund told Global Pensions magazine it supported measures put forward by Knight Vinke to improve performance at the bank. Knight Vinke accuses HSBC of being “too large and too complex to be controlled effectively” and is demanding it focus on core competencies to better shareholder value.
A US website has been launched giving investors access to a paid-for searchable database of pension fund legal actions. The site, run by Pension Governance and the Michel-Shaked Group, features more than 1500 class actions. Click here for site
The role of business in combating climate change, the place of biofuels in energy production and future water and waste management are on the agenda at the World Economic Forum Annual Meeting in Davos, Switzerland, which runs from January 23 – 27.
Ethos, the Swiss sustainable investment manager, has published the 2008 edition of its Proxy Voting Guidelines.
The report incorporates both Ethos’ best practice standards on corporate governance as well as the 2008 guidelines that will steer its shareholder voting positions. The company has revised its guidelines on issues of board directorships, executive remuneration and capital structure and voting rights. Ethos link
The Carbon Disclosure Project (CDP), a collaboration of over 315 institutional investors with assets of more than $41 trillion, has begun working with some of the world’s largest companies to assess greenhouse gas (GHG) emissions in their supply chains, including their subsidiaries in China.Companies working within the CDP Supply Chain Leadership Collaboration (SCLC) include Dell, HP, L’Oreal, PepsiCo, and Reckitt Benckiser. Cadbury Schweppes, Imperial Tobacco, Nestlé, Procter & Gamble, Tesco and Unilever, all joined the initiative in October 2007. The CDP says it aims to create a single standardised approach to provide key climate change information throughout corporate supply chains. The project will be rolled out in May 2008 with a subsequent report on progress.
Collaborative shareholder engagement with German companies could be hit if a proposed law relating to concert parties is passed in its current form, the European Corporate Governance Service (ECGS), a partnership of the leading corporate governance research and advisory groups in Europe, has warned. The ECGS has written to Eduard Oswald, chair of the finance committee of the German parliament, highlighting concerns that under the law two or more shareholders who engage with a company independently to raise a shared concern, without knowing of each others intentions, would be considered as ‘acting in concert’ whenever a significant or permanent shareholder is involved. It said it believed this could lead to legal uncertainties for market participants which may discourage institutional investors from voting or engaging with companies, or with each other, to improve corporate governance at listed companies. The German law was initially proposed to stop hedge funds acting together to apply pressure to German companies as was alleged in the case of Deutsche Boerse plans in 2005 to take over the London Stock Exchange.
Dow Jones Indexes has joined with Dharma Investments, the private investment firm, to launch a benchmark of companies selected according to the value systems and principles of Dharmic religions, especially Hinduism and Buddhism. To be included in the Dow Jones Dharma Indexes, stocks must pass a set of industry, environmental, corporate governance and qualitative screens for Dharmic compliance, which includes non-investment in sectors including alcohol, adult entertainment, animal testing and genetic modification of agricultural products.
International environmental organizations including Friends of the Earth and WWF have written to Sir Fred Goodwin, chief executive of Royal Bank of Scotland (RBS), demanding the bank recalls a controversial $1bn loan by ABN AMRO to Russian energy giant Gazprom. The money was used by Gazprom to purchase a controlling share of the Sakhalin II oil and gas project in Russia. RBS lead a consortium of banks that purchased ABN AMRO in 2007. The environmental groups say Sakhalin II has caused severe environmental problems and violates the Equator Principles, the banking project finance principles, to which RBS has signed.
Canadian investment managers are increasingly seeking to tie executive compensation to performance because of concerns about ‘pay for failure’ by pushing shareholder resolutions on the issue, according to Canada’s Shareholders Association for Research and Education (SHARE). Peter Chapman, executive director at SHARE, said: “Executive compensation was the big issue last year. Continuing shareholder support helped drive a number of resolutions aimed at curbing excessive pay packages for executives. Our survey showed strong support for these proposals.” However, SHARE’s 2007 Key Proxy Vote Survey, revealed that a majority of investment management firms surveyed (67%) indicate they are given complete discretion for proxy votes by their pension fund clients.It said many pension funds still turn over their proxy votes to investment firms without providing guidance on how those votes should be exercised.
Plans to cut greenhouse gas emissions, due to be unveiled by the European Commission this week, risk working against the environment and could destroy the competitiveness of European companies, according to the European Roundtable of Industrialists (ERT), a group of 50 of Europe’s biggest industrial companies. In a letter to Gunter Verheugen, European Union commissioner for enterprise and industry, Jeroen van der Veer, chief executive of Royal Dutch Shell and chairman of the ERT’s energy and climate change working group, said the EU’s plans to introduce an auction system for carbon certificates to replace the current free allocation of permits on a country-by-country basis could encourage undesirable protectionist measures, such as import taxes on goods from countries without similar schemes. The letter said the move could also damage the competitiveness of European industry by imposing costs that cannot be passed on to consumers, in turn, threatening investment in carbon capture and other environmental initiatives.
Five of the eight leading US presidential candidates support a federal cap-and-trade system to reduce greenhouse gas emissions, according to the US Chamber of Commerce. The US Congress is debating a series of energy options that will form the basis of future US policy on climate change and clean energy markets, including the introduction of a cap-and-trade emissions system.
The UN will this week publish a draft industry manual aimed at simplifying the market for developing country project credits that can be used for emissions trading under the Kyoto agreement. The manual aims to make the process more predictable and with swifter project registration and carbon credit issuance.
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