RI Global news round-up week end 26/10/07

The global RI news round-up.

The UK Local Authority Pension Fund Forum (LAPFF), an association of 44 public sector pension funds managing assets of £85 billion, has joined the UN Principles of Responsible Investment (PRI), starting a commitment to consider the integration of environmental, social and governance (ESG) issues in investments. There are currently more than 250 PRI signatories, with more than $10 trillion assets under management.
In another significant boost to the PRI, The Australian Capital Territory (ACT) government’s $1.4bn Superannuation Provision Account investment portfolio is to adopt the principles following recommendations from its board. In March this year, the Canberra Times revealed that the ACT Treasury’s cash reserves worth $1.4bn had been invested in tobacco companies, nuclear power producers and weapons firms that made cluster bombs. Goldman Sachs JBWere Asset Management has also signed up to the PRI.

Companies that can seize opportunities in climate change while ensuring they can manage any potential related risks to their business have tended to out-perform peers in the same sector financially over the past three years, according to research by Innovest, the environmental research company.
Innovest said the “Carbon beta premium” – the potential market return – for companies taking a lead on climate change appeared to be growing larger over time as regulatory regimes tighten around the world.Eumedion, the Dutch corporate governance lobby group has criticised
German government proposals to clamp down on investors acting in concert, saying it will lower the attractiveness of the German capital markets to investors, reports IPE.com.
The proposed new law, the Risikobegrenzungsgesetz, aims to stop shareholders collaborating as occurred in the takeover battle for Deutsche Börse in 2006.

NYSE Euronext, the transatlantic exchange, is to launch a carbon emissions trading market early next year with La Caisse des Dépôts, the French treasury management group as a major shareholder in the venture.
The market will trade CO2 allowances and credits and there are plans to develop derivative products to enhance market
liquidity and depth. The Montreal Exchange and the Chicago Climate Exchange are also planning to launch MCeX, a carbon futures contract based on Canadian emission credits by the end of 2007.

Deutsche Börse has launched two new sustainable equity indices in cooperation with Bank Sarasin. The DAXglobal Sarasin Sustainability Germany Index tracks the performance of German registered companies with sustainable performance. The DAXglobal Sarasin Sustainability Switzerland Index will do the same for Swiss companies with sustainable performance. Sarasin will examine and evaluate for their ecological and social effects on sustainable development sustainability.

Global product sales based on clean energy sources like wind, solar and geothermal power and biofuel could grow to as much as $1 trillion a year by 2030, according to US bank Morgan Stanley.
In a research note, the US bank said global population growth and soaring prices for fossil fuels were driving the market along with dropping costs in clean energy and concern about energy security and climate change.

The $13.1bn New Zealand state superannuation fund has pulled NZ$37.6m (US$28.2m) from tobacco holdings to meet its responsible investment framework. Adrian Orr, chief executive of the New Zealand Superannuation Guardians, said: “In assessing the issue of tobacco manufacture, the board concluded that the fund’s investment in this sector was inconsistent with our responsible investment standards. This decision was based on product safety issues and New Zealand’s commitment to specific international conventions.”Craig Mackenzie, the highly regarded specialist in socially responsible investment issues, is leaving his post in charge of development of CSR and SRI research issues at Glasgow Caledonian University’s Centre for Ethics in Public Policy and Corporate Governance, to take up a post at the University of Edinburgh’s School of Management. He starts on November 1. Mackenzie is also socially responsible investment advisor to Hymans Robertson, the investment consultant.

The Rainforest Action Network has accused Bank of America of environmental destruction in the Appalachian mountains of North Carolina through its financing of mountaintop removal coal mining and the construction of new coal-fired power plants.
Activists draped a 50-foot banner reading “Bank of America: Funding Coal, Killing Communities” across the street from the bank’s headquarters in Charlotte, North Carolina.