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RI round-up August 12

RI’s regular round-up of the most important responsible investment news.

Alexander Barkawi, managing director of Zurich-based SAM Indexes is to leave the company at the end of September. SAM is currently seeking a replacement for Barkawi, a respected speaker on SRI, who said he was leaving to pursue interests in the political arena on sustainability issues. Barkawi said the index business at SAM, which publishes and licenses the Dow Jones Sustainability Indexes, continued to be a strategic priority for the company.
Paul Myners, the UK Financial Services Secretary has suggested that shareholders could be given the ability to buy and sell their voting rights as a way to promote shareholder engagement with companies. Outlining possible ideas to improve corporate governance, Myners told Financial News that such a system might introduce some “market discipline” into voting. Myners said: “It would have to be limited, voting could not go beyond two votes per share, say. It is quite complicated, but it’s got merit.” Myners has been pushing Sir David Walker, who is leading a Government inquiry into corporate governance, to think as widely as possible and promote “radical changes” in current governance and shareholder ownership.
The US House of Representatives has voted in favour by 237 votes to 185 of the Corporate and Financial Institution Compensation Fairness Act of 2009, which would give shareholders the right to a ‘Say on Pay’ at corporations. It is expected that President Obama will support the reform meaning that it could come into effect as early as spring 2010.The UK Office of the Third Sector has published a consultation document on the creation of a Social Investment Wholesale Bank which would target lending to sustainable businesses with a social or environmental mission, which it said currently had trouble accessing funding and finance. Submissions must be received by October 7.
Link to consultation
The UK Investment Management Association reports that UK ethical investment funds saw their first outflows since it began keeping sales records in 1992. It said ethical funds recorded a net outflow of £18.4m in the second quarter of 2009, compared with an inflow of £45.9m during the first quarter.
Despite the outflows, the IMA said total ethical investment funds under management in the UK totalled £4.5bn in the second quarter of 2009, up from £4.1bn the quarter before. 


Over half of large UK charities now have an ethical investment policy, according to a survey conducted by the Charity Finance Directors’ Group (CFDG) and the EIRIS Foundation. However, smaller charities are less likely to invest ethically, the survey of 164 CFDG members found. Approximately 60% of charities with investments over £1m had an ethical investment policy while only 25% of smaller charities with investments under £1m did so. It said that 32% of charities without an ethical investment policy said they planned to discuss the issue in the coming year. However, non ethical investors said key barriers to doing so included concerns that ethical investment would lead to lower returns

(identified by 40%), concerns over the legality of ethical investment in terms of their duty to maximise returns (28%), lack of staff resources (25%) and perceived complexity (24%). Of the charities investing ethically, 88% use negative screens, 25% use positive screens, 19% engage with companies via their fund managers and 9% vote shares on ethical issues.Two thirds (66%) of 71 French private equity companies responding to a survey sent out to 300 houses say they take ESG considerations into account in their financial decisions, according to Novethic, the French sustainability research group.
Most of the private equity groups, members of France Investissement and AFIC, the country’s sector associations, said, ESG insight offered economic value, but that extra-financial research tools remain underdeveloped. As of the end of June 2009, 33 private equity firms, of which 5 French companies, had joined the PRI.
Link to Novethic survey
Footwear brands, including Clarks, Adidas, Nike and Timberland, have demanded an immediate moratorium on destruction of the Amazon rainforest from their leather suppliers in Brazil, reports the Guardian newspaper in the UK.
It follows a three-year investigation by Greenpeace, which found that leading Brazilian suppliers of leather and beef for products sold in Britain had obtained cattle from farms involved in illegal deforestation.
HypoVereinsbank subsidiary III-Investments has launched the first real estate spezialfond to invest exclusively in ‘green’ real estate assets, reports IPE Real Estate. The Green Building Fund aims to invest €400m over the next two to three years in sustainable and energy-efficient real estate developments and properties in Western Europe certified according to either nationally or internationally-accepted sustainability standards (BREEAM, LEED, HQE, DGNB). Reinhard Mattern,managing director at III-Investments, said investors were becoming increasingly interested in the potential economic benefits of investing in sustainable buildings. Low energy costs in the long-term also mean that green buildings are preferred by tenants and achieve above-average rental rates, he added.
SAM and Dow Jones Indexes have launched the Dow Jones Sustainability Japan 40 Index. The index measures the performance of the largest 40 sustainability leaders in Japan and is selected and weighted based on SAM’s sustainability scores. The index is rebalanced annually in September and calculated in U.S. dollars and Japanese yen.
Sonia Wildash, senior researcher in the US for London-based EIRIS, the SRI research house, is leaving to join Robert Brooke Zevin Associates (RBZA) as its new director of socially responsible investing on August 19th. RBZA is a Boston-based boutique SRI asset manager. Wildash will revert back to her maiden name of Kowal for the new job.
Richard A. Bennett, president and chief executive officer of The Corporate Library, the corporate governance research and risk analysis group, has been elected to the Board of Governors of the International Corporate Governance Network (ICGN). ICGN is a not-for-profit, global organization of leaders in corporate governance whose mission is to raise standards of corporate governance worldwide.
Link to ICGN
Assets at Sarasin Group, the Swiss private bank and asset manager, managed according to sustainable principles rose by 68% to reach CHF 10.1bn (€6.6bn) by June 30, following the decision taken last year to switch the portfolio management mandates of private clients in Switzerland to a sustainable investment style. The number of mandates managed according to sustainable principles also rose by 44% during the first half of the year.