RI round up: Apr 09

South Africa’s Government Employees Pension Fund has set out its new Responsible Investment policy. “We cannot ignore the fact that the way we do business is changing and whether we like it or not, we need to adapt to this changing environment,” said GEPF chairman Arthur Moloto. The R639.7bn (€65.9bn) fund, a founding signatory of the UN PRI, held a conference on its RI policy in March. Download PDF
A global, voluntary, standard on social responsibility has taken a step closer. The International Standards Organisation says the proposed ISO 26000 yardstick has now progressed to the ‘Final Draft International Standard’ stage. The body said it would now work to address the 2,650 comments it has received on the proposal, first mooted in 2005. ISO 26000 should achieve International Standard status by the end of this year. Link
Sumitomo Mitsui Asset Management has become a signatory to the United Nations Principles for Responsible Investment. SMAM, one of Japan’s leading fund management houses with more than US$100bn under management billion, signed up in March, saying: “We believe that we would be able to make our research more sophisticated by explicitly analyzing non-financial factors such as ESG and to improve investment performance.”Singapore’s Temasek sovereign wealth fund has invested $47.8m (€35.9m) in California-based renewable energy firm Amyris Biotechnologies. Amyris said it intends to use the cash to support commercial plant design and construction as well as its operations in the US and Brazil. Amyris, headed by former BP’s US fuels president, John Melo, has secured $244m in private funding since inception in 2003.
ABP has joined fellow Dutch pension fund giant PGGM in committing to Grassroots Capital’s Global Microfinance Equity Fund. Last year PGGM put $60m into the fund. ABP said: “This kind of investment is particularly suitable for a pension fund, as it aims to achieve double bottom line returns by investing capital in start-up and intermediate MFIs.” GMEF plans to invest in around 50 microfinance institutions, primarily in India, Latin America and Africa.
CalPERS is planning to set up a hotline for whistleblowers to report misdemeanours by staff. The largest US pension fund has put out a request for proposal “soliciting bids from qualified firms to provide a whistleblower hotline, herein referred to as the ‘Ethics Helpline’”. The move follows the ‘pay-to-play’ scandal at the $210bn California fund.
The Association of British Insurers says institutional shareholders are increasingly voting against UK
company boards over issues like pay and strategy. The ABI’s Institutional Voting Information Service found an average of 30% of shares were not voted in favour of management in 2009 on hot button issues – up from 13% the previous year. “It is clear that shareholders are ready to signal their impatience with companies whose remuneration approach does not take account of the impact of the economic downturn,” said Peter Montagnon, ABI’s director of Investment Affairs.
The new Global Impact Investing Ratings System (GIIRS) has signed up its first partner, Investors’ Circle. GIIRS was launched in January by non-profit organisation B Lab in collaboration with the Global Impact Investing Network and the Rockefeller Foundation. GIIRS aims to drive more capital to higher impact investments by providing investors with comparable impact ratings and analysis for companies and funds.
Caisse des Dépôts (CDC), France’s state-owned investment fund, has formed a renewable energy investment company with partners Société d’Equipement de la Région Lyonnaise, EdF’s Safidi, GDF Suez Energies Services and the Caisse d’Epargne Rhône-Alpes. The move follows the launch of CDC’s new climate change subsidiary CDC Climat.
RiskMetrics’ top managers have said the firm remains committed to the ESG business following the merger with MSCI. Chief executive Ethan Berman and ESG headRan Fuchs said in a blog post: “By joining forces with MSCI, we will have more opportunities to expand the reach of ESG investing. We are excited about what this merger will mean for the ESG Analytics team, and for all of our clients.”
US pension funds have joined the shareholder rebellion on BP’s controversial Canadian oil sands projects. CalPERS and CalSTRS have said they will back a resolution at BP’s annual general meeting on April 15 calling for it to report on the financial and environmental risks involved in developing oil sands. The issue has split the investment community after the UK’s Local Authority Pension Fund Forum came out in support of BP.
Real estate firm CB Richard Ellis has launched a solar service for property owners in partnership with solar finance outfit Smart Energy Capital. CBRE Solar will offer solar power purchase agreements, roof leases, advisory services, project development services, project management services and solar project investment opportunities.
UK investment manager Threadneedle has launched a fund that will invest in low-carbon commercial property in the UK. The firm aims to raise £350m (€400.5m) from institutional investors within three years for the fund, the Low-Carbon Workplace Trust. Threadneedle has partnered with developer Stanhope for the project, which plans to refurbish up to 50 properties over the next five years.
Bahrain has proposed a new corporate governance code for public companies which builds on international best practice. Referring to the global financial crisis, Central Bank of Bahrain Governor Rasheed Mohammed Al Maraj said: “It is in this context that the CBB views the new Code as a significant development in strengthening Bahrain’s reputation as a well regulated financial centre.”
The Hong Kong Stock Exchange has published its 2009 Corporate Social Responsibility Report, prepared in accordance with the Global Reporting Initiative guidelines. “HKEx aims to take a leading role to promote the transparency and accountability of CSR performance to stakeholders and the development of socially responsible practices in our marketplace and community,” said exchange chairman and CEO Charles Li. Download PDF
Think tank Tomorrow’s Company says the Swedish model of shareholder engagement could be applicable in the UK. It has submitted a report to the Financial Reporting Council and called for the annual election of chairmen and directors of listed company boards. The study is called ‘Tomorrow’s Corporate Governance: Bridging the UK engagement gap through Swedish-style nomination committees’. It was supported by activist investor Cevian Capital. Link
Allianz Global Investors’ Risklab arm has released a study showing that ESG factors can significantly improve investors’ risk/return profile in a portfolio context. Munich-based Risklab is Allianz’s specialist investment and risk advisory subsidiary. The report is called ‘ESG Risk factors in a Portfolio Context’.Credit Suisse’s Global Responsible Equities Fund has grown to more than €75m in assets under management since it was launched in January 2009, according to the company’s latest annual corporate citizens report. The fund is targeted at clients who want to combine their investments with social and environmental commitments, with input from research provider Global Ethical Standard Investment.
The Arabia Corporate Social Responsibility Network and the Hawkamah Institute for Corporate Governance have signed a Memorandum of Understanding aimed at enhancing corporate governance and sustainable business practices in the United Arab Emirates and the Gulf Cooperation Council region. The document was signed by Hawkamah’s Nasser Al Saidi and Habiba Al Marashi of the Arabia CSR Network.
Standard & Poor’s and the Toronto Stock Exchange have launched a new cleantech index. The new S&P/TSX Clean Technology Index will use research and analysis from Jantzi-Sustainalytics. Constituents will fall into five categories: renewable energy (production and distribution); renewable energy (specialised suppliers); energy efficiency; waste reduction and water management; and low impact materials.
Colonial First State Global Asset Management has appointed Thomson Reuters’ ASSET4 as its new environmental, social responsibility and governance research provider. ASSET4, bought by the information giant late last year, will provide research across all asset classes. “We favoured ASSET4 because their broad coverage includes sovereign and unlisted companies
that can be used by the credit and fixed income teams, and they have in-depth coverage of emerging markets companies,” said Colonial’s CIO David Dixon.
Norwegian state-run asset manager Folketrygdfondet has supported a capital raising exercise by Renewable Energy Corp. in which it is a major shareholder. Solar energy firm REC had sought a total of NOK14bn (€1.8bn) of financing. A consortium of banks also participated. Folketrygdfondet runs Government Pension Fund Norway and the Government Bond Fund for the Ministry of Finance.
Advisory firm ISS/RiskMetrics says UBS shareholders should oppose the discharge of the Swiss bank’s board and top management over losses resulting from the financial crisis. UBS is facing a shareholder revolt at its annual general meeting on April 14, after Ethos, the influential Swiss sustainable investment group, said it would oppose its board remuneration report and maintain pressure on directors to seek redress for the crisis at the bank.
Canadian bank CIBC has formed a 10-person clean technology investment team. CIBC, Canada’s fifth-largest bank, said the unit will offer a range of wholesale services, such as pre-IPO private placements, project financing, public equity issues, loans and M&A advice.CalSTRS, the California State Teachers’ Retirement System, is considering investing in microfinance. The $132.6bn (€99bn) fund has put the issue on the agenda
for an investment meeting this month. It puts demand for microfinance loans at $300bn with supply at just $38bn. “In much of the developing world, financial services need to be made available and improved in order to enable the economically poor to keep pace with economic growth,” an internal CalSTRS report says.
The Yale Endowment has said its cleantech portfolio has grown to more than 70 companies, worth more than $100m – representing 6.4% of the Endowment’s venture capital portfolio. It said: “In the past year alone, Yale’s venture capital managers invested in over nine new cleantech companies. Yale has increased its exposure to the sector in the marketable, real assets, and leveraged buyout portfolios as well.”
The Avon Pension Fund, a £2bn local authority scheme in the UK, is “working towards” achieving the UN PRI standard. The investment committee at the fund has also resolved to recommend that the fund appoint a vote monitoring service and make incumbent asset manager Jupiter’s £65m SRI mandate “more inclusive with respect to UK equities”.