Lord Myners, author of the influential Myners report on pension fund governance in 2001, has criticised shareholders for acting like “absentee landlords” and said they should engage more with the companies they own, reports the Financial Times. At a conference held by the Association of Investment Companies (AIC), Myners, UK City minister, said investors should probe issues such as pay and how it influences corporate behaviour. He said the UK government had also extended a review by Sir David Walker, former chairman of Morgan Stanley International, on banks’ governance following the financial crisis to include hedge funds, asset managers and insurers. Myners also called for a radical review of the UK’s corporate governance code by the Financial Reporting Council. In a speech to the UK National Association of Pension Funds conference in March, Myners said the UK government was looking at ways to push investors to collectively challenge companies more vigorously and be active owners. He said he would bring investors together with corporate non-executive and executive directors for a meeting later this year designed to see “what the gaps are” regarding greater investor scrutiny of companies.
BankTrack, the NGO has relaunched its ‘Bank Profiles’ section, featuring 15 bank profiles on voluntary ESG commitments, internal ESG policies, possible Equator Principles commitments and a rating of the quality of all ESG commitments in a number of key sectors and issues. BankTrack expects to have over 60 bank profiles in the next few months.
Link to BankTrack site*A survey for the Carbon Disclosure Project* (CDP) of the world’s 249 largest quoted electricity companies has found that just 16% of 110 responding companies set and disclosed absolute carbon emission reduction targets. Of the respondents, 41% had no emission reduction plans and less than half disclosed information on their electricity generation capacity and fuel mix, although 61% said they did forecast future greenhouse gas emissions. Doug Cogan, director of climate risk management at RiskMetrics, which carried out the survey, said the report left question marks over the future strategy of electricity companies between paying to cut emissions or passing the cost to customers in the face of cap and trade emissions schemes or carbon taxes. Jack Ehnes, chief executive of the California State Teachers’ Retirement System (CalSTRS) which sponsored the research, said: “Our members depend on us for their retirement security and we have a financial stake in building the long-term value of the most carbon-intensive sector of our economy. Electric utilities must act now to reduce their exposure to greenhouse gas emissions in the coming carbon-regulated economy.”
Link to CDP site
Amnesty International has called on Citi, the US banking giant, to engage with companies including PetroChina operating in Sudan in which it holds shares. At Citi’s annual general meeting this month, Amy O’Meara Amnesty’s US director of business and human rights, said its research based on Bloomberg reports, showed that in January 2008, Citi reported holding $1bn in PetroChina shares. Amnesty said Citi should consider
ways to use its position as an investor to support calls for change in Darfur. She said an Amnesty-backed coalition had filed similar proposal at 6 firms and subsequently withdrawn them at Morgan Stanley, Merrill Lynch and T Rowe Price as a result of commitments to engage with companies in Sudan.
The SRI team at Henderson, the UK fund manager, has launched a blog. First posts include views on the safety of consumer products, the proposed smart grid in the US and the SRI world’s developing views on nuclear power. Link to blog
The Cambridge Programme for Sustainability Leadership, in conjunction with PwC and Sustainable Finance is running Financing the Future, a forum for the finance sector to examine the future of companies and markets in the context of global climate change. It takes place in Cambridge, UK from June 22nd-24th. Confirmed speakers include Jonathon Porritt, chairman, Sustainable Development Commission & founder director, Forum for the Future and Richard Burrett, former global head of project finance, ABN AMRO, now facilitator, Prince of Wales’s Corporate Leaders Group on ClimateChange.
Link to site
A quarter of 2,200 companies listed on the FTSE All-Word Developed Index companies are adequately managing their environmental, social and governance (ESG) risks against best practice, according to Eiris, the sustainable research company. Eiris looked at companies over a three-year period (2005-2008) and found the financial sector to be the worst performer with almost a quarter of financial institutions in 2008 failing to disclose any evidence of ESG risk management – at least twice that of any other sector.
Link to report*The insurance industry is failing* to respond sufficiently to the risks and opportunities of climate change despite finding hundreds of new initiatives in insuring green buildings, renewable energy, carbon risk management, and officers’ liability, says a report by Ceres, the US environmental investor coalition, The report, From Risk to Opportunity: Insurer Responses to Climate Change, was commissioned following more than $200 billion in global catastrophic losses in 2008, the third highest ever reported, including $40 billion from Hurricanes Ike and Gustav in the U.S. Ceres said scientific data showed that rising temperatures were likely to increase the intensity of hurricanes, floods, drought, wildfires and other extreme weather events in the U.S. and globally.
In March 2009, the US National Association of Insurance Commissioners said it would require insurance companies to disclose to regulators and investors the financial risks they face from climate change, as well as actions the companies are taking to respond to those risks.
Link to Ceres
Robert Massie, co-founder of the Global Reporting Initiative (GRI) in 1998, has been awarded both of the 2009 Joan Bavaria Sustainability Awards for innovation and long-term impact run by Ceres, the US environmental investor coalition.
The awards honour the late Joan Bavaria, who founded both Ceres and Trillium Asset Management. Bavaria passed away last November. The awards also recognised Massie’s promotion of the first Investor Summit on Climate Risk at the United Nations and the formation of the Ceres-led Investor Network on Climate Risk (INCR) in 2003, which to 80 investors managing more than $7 trillion in assets.
The Boston College Institute for Responsible Investment has published the Handbook for Climate-Related Investing across Asset Classes, funded by the Brooks Family Foundation. Section include information on how to devise a portfolio-wide strategy to climate-related investing, identify the asset class specific considerations for climate-related investing and examples of existing products to illustrate asset class specific considerations and opportunities.
Link to site
A shareholder proposal by Railpen Investments, the UK railways pension scheme, filed by London-based Governance for Owners that aimed to push Texas Instruments in the US to appoint an independent chairman at its April 16 AGM attracted 42.5% of the vote. The proposal was the first Railpen had submitted to a US company. Frank Curtiss, head of corporate governance at Railpen, said “We see this as a significant expression of shareholder concern about the lack of effective independent board leadership. We hope that the board will take heed and engage with shareholders on this important matter.“The International Finance Corporation’s Global Corporate Governance Forum has issued an opinion brief titled: Towards an Accountable Capitalism, which looks at causes of the global credit crisis and offers a roadmap for developing a more sustainable form of capitalism. The review was authored by Stephen Davis, Jon Lukomnik and David Pitt-Watson
Link to paper
First State Investments has launched a Global Emerging Markets Sustainability fund to UK and European retail and institutional investors. The fund, which will be benchmarked against the MSCI Emerging Markets Free index is managed by David Gait and will target sustainability leaders in areas including renewable and cleaner energy, energy efficiency and waste and water management with a focus on positive engagement with company management.