Nominations are open for the third-annual Joan Bavaria Awards for Building Sustainability into the Capital Markets. The deadline is March 5, 2010. The Awards celebrate Joan Bavaria, founder of Ceres, Trillium, and the Social Investment Forum, who died in 2008. There are two awards: one for a proven sustainability innovator; a second for a long-term results-getter – in the effort to move capital markets from a focus on short-term profits toward a system that balances financial prosperity with social and environmental health.
Link for awards
France’s state-owned investment fund, Caisse des Dépôts (CDC), has launched a new climate change subsidiary called CDC Climat. It will make direct investments and set up new funds targeting the Mediterranean, Europe and France open to other long-term investors with a view to raising €500m by 2014. CDC’s investment stakes in BlueNext, Metnext and Sagacarbon and its carbon fund investments will be integrated into the new division. CDC says it aims to reduce CO2 emissions by 25m tonnes per year worldwide, equivalent to 5 % of France’s annual emissions.
The Joseph Rowntree Charitable Trust has reportedly become the latest institutional investor to sell shares in Vedanta, the FTSE 100 company, in protest at Vedanta’s approach to human rights and the environment in India. The Guardian newspaper said the trust had sold its £1.9m stake.
US tech exchange NASDAQ and Deutsche Bank’s DB Climate Change Advisors unit have launched a global alternative energy and clean technology stock index. The DB NASDAQ OMX Clean Tech Index comprises 119 companies, including 30 in solar energy and 12 in wind power. The constituents must have a market capitalisation of $250m and over $1m in daily average trading volume. The index is equal-weighted to offer greater exposure to smaller-cap companies.Denham Capital, whose investors include the Massachusetts Pension Reserves Investment Management Board (Mass. Prim), has made an additional investment in geothermal energy developer Vulcan Power Co. The additional $108m backing brings its total investment to $166m. Denham has about $4.3bn under management. Last year, Harvard Management Co. sold a $150m stake in Denham’s latest energy and commodities-focused fund to Mass. Prim.
Espirito Santo, Portugal’s banking and insurance giant, is backing a company which develops smart grid and solar systems for utilities. Its venture capital arm Espírito Santo Ventures and Craton Equity Partners are two new investors in Petra Solar, along with existing investors Element Partners, Blue Run Ventures, OnPoint Technologies and Kuwait’s NTEC. Espírito Santo Ventures has more than €200m under management.
Climate Change Capital has closed its new property fund after raising £69m (€79.4m) from investors in the UK, Europe and Australia. The fund will invest in commercial real estate and retrofit existing buildings to improve energy efficiency.
Sovereign wealth funds are being targeted by Japanese finance house SBI Holdings, which is looking to raise $330m for a venture capital fund covering Asian firms developing solar power, electricity-storage and water treatment. Businessweek.com reports that SBI expects to raise funds from investors such as Singapore’s Temasek and Abu Dhabi’s Masdar. The move would build on SBI’s $20m pilot fund with Abu Dhabi’s Mubadala arm.
Luxembourg is developing a renewable energy and climate change label for investment funds, according to local fund body, ALFI. The move by the Luxembourg Fund Labelling Agency aims to increase transparency for investors. ALFI cited research from Thomson Reuters that 86% of assets under management of cross-border SRI funds are now invested in funds domiciled in Luxembourg.
The Forest Footprint Disclosure project, backed by 34 institutional investors such as APG, NBIM and the Local Authority Pension Fund Forum, has released its inaugural report. It reveals which major companies have responded to a call to disclose details of their “forest footprint” and how their use of forest commodities affects deforestation.
Link to report
The £3bn (€3.45bn) Lothian Pension Fund in Edinburgh is searching for a European class action lawyer for future litigation cases. The fund, already active in US class actions, has been the lead plaintiff in cases involving Vodafone, UBS and Lehman Brothers.
The UK government is reportedly considering offering “green bonds” to the public through the National Savings scheme. Treasury minister Ian Pearson told the Financial Times that he had asked officials to examine the idea of National Savings and Investments offering bonds to attract retail investors to low-carbon energy production. The government is also looking at offering long-term public sector contracts to wind farms and green waste companies.
Research by Mercer, the investment consultant, and funded by the Investor Responsibility Research Center Institute has found that almost two-thirds of institutional investment strategies have shorter investment horizons than intended. The study found that stock turnover was on average 26% higher than anticipated. IRRC program director Jon Lukomnik called it a “systemic issue”. The study is titled: “Investment horizons – do managers do what they say?”
Link to report
Norway’s €280bn Government Pension Fund Global has hired GES Investment Services to screen its investments in tobacco and weapons stocks. The four-year mandate was awarded by the fund’s Council on Ethics and starts in March. In addition, GES will monitor companies that have already been excluded from the Fund’s portfolio.
Ethos, the Swiss responsible investment group, has called on shareholders to oppose the re-election of Hans-Jörg Rudloff as chairman of the remunerationcommittee at Novartis, the Swiss pharma company. Ethos cited his role in overseeing the “excessive” pay structure at the firm.
A US clean energy regulation bill is expected this year, according to Democratic Congressman Edward Markey. He told the World Economic Forum that he “fully expects” the Senate and House of Representatives to produce such a bill by year-end. He said: “The reason that I believe that will happen is that it is in our national security and long-term economic interests.” Markey and Republican counterpart Henry Waxman co-sponsored a 946-page clean-energy bill.
State Street has agreed to pay $310m to investors including charities, non-profit companies, religious institutions and retirement funds relating to charges by US regulators that it misled investors about the risks in its Limited Duration Bond Fund faced as a result of the sub-prime mortgage crisis in 2007.
A fund backed by Shell and the Abu Dhabi Investment Authority has added to its investment in Scottish wave energy company AWS Ocean Energy. AWS has attracted £2m from the Shell Technology Ventures Fund 1 – in which ADIA is an investor – and the Scottish Co-investment Fund. AWS will use the funds to deploy its technology and design associated technologies, such as mooring systems, for wider use.
The New York City Pension Funds have won a settlement in their class action suit against tech firm Juniper. City Comptroller John Liu said: “On behalf of the New York City Pension Funds and other institutional investors across the country, I am proud to acknowledge a tentative $169m settlement in our class-action lawsuit against Juniper Networks, Inc. for backdating stock option grants. That practice enriched their executives at the expense of shareholders and our retirees.”
Quotient Investors, the US quantitative boutique which is part of CalPERS manager development programme, has launched an equity strategy focused on companies with ESG, or environmental, social and governance factors. The strategy, dubbed Quotient Sustainable Alpha, received $9m from CalPERS in December. The California pension giant seeded Quotient with $150m in 2008.
Investors can reduce the carbon intensity of their equity portfolios by up to 35% if they rebalance their equity portfolio accordingly, according to a report for the German Ministry for the Environment. Adelphi Consult and INrate looked at the five largest conventional and climate/sustainable investment funds with the greatest volume listed in Germany.
Link to report
The UK’s introduction of feed-in tariffs for low carbon electricity and heating has been welcomed by investors. Under the plan, households and communities installing small wind turbines and solar panels will be entitled to claim payments for the electricity they produce. Steve McMahon, chief investment officer at Low Carbon Investors, said the move should help encourage the levels of finance required to make a viable form of generation.
Relatively few European companies are responding to calls from investors, regulators and NGOs to link extra-financial ESG issues to executive pay, according to research by EIRIS and Eurosif.
Link to report publications/remunerationjan10.pdf
SAM, the Swiss sustainability specialist asset manager, has launched a new fee structure for institutional investors. It will combine a fixed fee covering the setting up and running the mandate along with a performance-based fee. “The scheme calls for a mutual agreement on the investment horizon to reflect the mandate’s long-term orientation and to allow the asset management to implement its investment strategy and earn a performance fee over the market cycle,” SAM said.
Nikko Asset Management is launching a retail fund investing mainly in Green Bonds issued by the World Bank. The SMBC Nikko World Bank Bond Fund will be aimed at Japanese investors and invest in green bonds in about 20 different currencies. It’s targeting a yield of between 7-8% per annum. A second fund for international institutions may follow shortly.
France’s Responsible Investment Forum, FIR, has announced the winners of its 2010 prize for research into sustainable finance and development. The award for best research article went to Ireland’s Niamh O’Sullivan and Brendan O’Dwyer for their work on NGOs and the Equator Principles in the Accounting, Auditing and Accountability Journal.
Link to winners*Maplecroft, the ESG risk firm*, has launched three indices measuring US companies that are best equipped to handle environmental policy changes and produce climate-related innovation. The three Climate Innovation Indexes are available via Bloomberg. They are: the Maplecroft CII Benchmark; Maplecroft CII Leaders and Maplecroft CII US 100.
Deutsche Post has been excluded from the investments of Triodos, the sustainable banking specialist, because of the Burma operations of DHL, a subsidiary company. A Triodos spokesman said: “Doing business in Burma is a reason for Triodos to exclude a company.” Other companies excluded as a result of the bank’s latest research include Arcadis, the infrastructure consulting firm, because it provides advisory services to the nuclear power industry.
A group of investors has challenged US natural gas companies to increase transparency and protect the environment. The campaign is being led by Green Century Capital Management and the Investor Environmental Health Network with the New York State Common Retirement Fund and Trillium Asset Management also involved. They’re targeting firms such as Cabot Oil & Gas, Chesapeake Energy, ExxonMobil, Hess Corporation, EOG Resources and Range Resources.
A group of 59 investors with almost $200bn in assets has called on electronics companies to make sure they are not using minerals that may be fuelling the war in the Democratic Republic of Congo. DRC is rich in gold, tantalum, tin and tungsten. “We are asking companies to leverage their economic power to bring about positive change in the Congo,” said Patricia Jurewicz, director of As You Sow’s Responsible Sourcing Network.
Deutsche Bank has claimed that pension funds could be neglecting their fiduciary responsibilities by ignoring the growing opportunities in climate change-related sectors. Deutsche said that since the equity market troughs last year, renewable energy, energy efficiency, water and agribusiness produced better returns than their peers.
Hermes Equity Ownership Services has appointed Glass Lewis & Co. to provide proxy research and vote execution, replacing RiskMetrics group. Glass Lewis chief executive Katherine Rabin, said: “Our alliance with Hermes EOS is a big step forward for our expansion throughout Europe.”
The NZ$15.9bn (€8.1bn) New Zealand Superannuation Fund has appointed Elementum Advisors, a new house formed last year, to run an initial US$125m (€89.5m) in catastrophe-linked securities – with potential for the mandate to grow to $250m. The securities transfer specific insurance-related risks to the capital markets, the fund said. The risks relate to exposure to losses arising from natural events, typically hurricanes, earthquakes or windstorms.
Computer giant Apple has reportedly told shareholders to reject calls for it to publish an annual sustainability report. Corporate accountability group, As You Sow, has been campaigning for Apple to report on greenhouse gas reduction targets, citing IT firms such as Hewlett-Packard and Dell, which already issue such reports. For the second year in a row, Apple’s board has recommended shareowners to vote down the proposal.Italy’s ECPI, the ESG research house, has teamed up with management consultancy Arthur D. Little to launch an index of mid-to- large cap companies best able to respond to higher carbon emissions and tougher climate legislation. ECPI said its Global Carbon Equity Index would have outperformed the MSCI World Index by 68.78% between 2006 to the end of 2009.
Indonesia is planning a $1bn fund to tackle climate change, according to reports. A senior advisor to the Ministry of Finance in Jakarta was quoted by Business Week saying the Government Investment Unit would contribute $100m to the Indonesia Green Investment Fund. The further $900m would be raised from governments and institutional investors.