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RI round-up April 11

RI’s bite-sized round-up of the week’s responsible investment news

Merrill Lynch, the US investment bank, has included Swiss ESG research house Asset 4 in a new open equity research service for buy-side clients. Merrill Open Minds provides access to Merrill’s proprietary research and that from seven independent providers in areas such as extra-financial information, corporate integrity risk, federal policy, healthcare, media, energy and consumer surveys. Both Goldman Sachs and UBS have launched similar open independent equity research services.
FTSE and Bolsas y Mercados Españoles (BME) have jointly launched the FTSE4Good Ibex index for responsible investment into the Spanish market with an initial listing of 27 companies. Jorge Yzaguirre Scharfhausen, head of equity unit at BME, said: “The launch of the index will contribute to a greater awareness of the importance of responsible investment in Spain, which the Spanish stock exchange wants to lead.”
The United Nations Environment Programmme Finance Initiative (UNEPFI) has held the European launch of its “Bloom or Bust” publication, which examines risks and opportunities for the financial services sector on biodiversity and ecosystem services (BES) issues. Download report
UNEPFI, in association with Eco-Frontier, Korea, will hold its Conference on Sustainable Finance in Seoul on 17 and 18 June. The event will include special joint sessions and a gala dinner with the Principles for Responsible Investment (PRI) and the UN Global Compact. The conference is expected to attract 200 participants from the finance sector, policy makers, academia and civil society. For further information,
Click here*South Africa’s Public Investment Corporation* (PIC), the R719.8bn (€59bn) government owned fund manager, which runs assets including the Government Employees Pension Fund (GEPF), stepped up its corporate governance activism during 2007, voting against company boards more than 70 times at annual general meetings last year. See votes
IDEAM, the socially responsible investment (SRI) arm of Credit Agricole Asset Management (CAAM), has launched a water-themed equity fund, the CAAM Funds Aqua Global.
Ethos, the Swiss ethical investment foundation, is reportedly planning to oppose the election of Mathis Cabiallavetta, former vice-chairman at Marsh & McLennan, to the board of Swiss Re at next week’s AGM. Dominique Biedermann, executive director at Ethos told Financial News there had been certain “issues” at Marsh & McLennan subsidiaries during Cabiallavetta’s tenure, including a 2004 investigation by then New York State Attorney-General, Eliot Spitzer, into whether Marsh & McLennan had received payoffs from insurers that it recommended to clients. He said: “We are not sure he should join Swiss Re and we will vote against.”
A California Assembly bill that could have prevented CalPERS and CalSTRS from investing in private equity firms partly owned by sovereign wealth funds has been withdrawn.
*Germany is drafting a new law *to allow it to block the purchase of more than 25 percent in certain German companies by investors from outside the European Union, a move perceived as targeting sovereign wealth funds, reports German newspaper Handelsblatt.

The $395bn Norwegian Government Pension Fund plans to invest up to 5% of its assets in real estate and expand its benchmark portfolio to include more emerging markets. Norway’s Finance Minister Kristin Halvorsen said it also planned to increase the fund’s limit on ownership stakes in individual companies from 5% to 10%. The fund returned 4.3% in 2007 and since 1998, average annual nominal return has totalled 6%. The fund has also instigated a ban on investing in companies selling arms or weapons technology to a country whose sovereign bonds are excluded from its investment universe, which notably includes Burma. It said a preliminary review suggested there were currently no such companies in the fund’s portfolio. The Norwegian government will circulate a discussion paper on the ethical guidelines of the fund this spring as part of a broad public consultation process. An evaluation of the ethical guidelines will be submitted to the Storting, the Norwegian parliament in the spring of 2009.
Man Group, the London-based hedge fund manager, has launched Man Environmental Capital Opportunities, a private equity arm specialising in environmental investments. Nick Wood, a member of the management committee at Man Investments, said: “Man ECO will source and originate direct private capital investment funds based on environmental issues in various parts of the world. Investing in projects that benefit the environment is becoming more and more popular and we see great opportunities to benefit investors and our natural world together.” In December, 2007, Man said it raised €400m for its China Methane Recovery Fund, investing in the extraction of methane gas from coal mines in China’s Shanxi province to generate electricity and carbon credits.NGOs are calling upon Barclays, UBS and investors including Fidelity and hedge fund RAB Capital to follow a decision by the Asian Development Bank to pull out of the controversial Phulbari coal project in Bangladesh. According to NGOs, work on the open cast mine will displace some 50,000 people.
South Africa’s Standard Bank Group has been awarded a specialist Sub Saharan African debt mandate subject to a socially responsible screening process by the Overseas Private Investment Corporation (OPIC), a US development finance organisation backed by the US Government. OPIC has committed up to $100m in funding for the Standard Africa Development Fund, jointly run by Standard Asset Management in London and STANLIB Asset Management in Johannesburg. Kevin Colglazier, chief investment officer at Standard Asset Management, said, “Africa is the ultimate frontier, it does not have a sub prime problem and the economy as a whole, excluding Zimbabwe, is expected to grow by over 6% during 2008. We believe that this is an ideal time to invest as one gets access to the ground floor of what is potentially a very profitable nascent opportunity.”
Phaunos Timber Fund is to establish a joint venture with Aitchesse Limited the Scottish-based forestry specialist, to invest in Eastern Europe. Phaunos said it would potentially commit up to $150m to the new joint-venture, with investments beginning as early as the second quarter of 2008. Phaunos’ investments are managed by FourWinds Capital Management.
KPMG claims that six major industry sectors are in particular danger from climate change risks. In a report titled “Climate Changes Your Business” based on a review of 50 published studies addressing the business risks and economic impacts of climate change at sector

level.It singled out aviation, healthcare, tourism, transport, oil and gas and the financial services sector as being in a “danger zone”, which it said meant they scored highly on the risks which face them yet score poorly in terms of their preparedness to face these risks. The full report, Climate Changes Your Business, can be found at: Site link
UK quoted companies could be forced to detail carbon emissions in their annual reports, reports UK newspaper, The Independent.The report cited government sources saying that an amendment to the Climate Change Bill introduced last week was expected to become law in the summer.
The Prix Pictet 2008, the first ever world photography competition for pictures on the topic of sustainable development, sponsored by Pictet, the Swiss banking group, will be announced at a gala dinner at the Palais de Tokyo, Paris on October30. The venue will exhibit all the short-listed nominations from 30 October-8 November.
Luqman Arnold, former president of UBS turned activist investor, has written to UBS calling for the bank to be broken up. The letter was sent after Arnold’s investment company, Olivant, took a 0.7% stake in the bank.