RI round-up July 25

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

The Irish Congress of Trade Unions (ICTU) says the country’s €19.4bn National Pension Reserve Fund (NPRF) should urgently introduce ‘socially responsible investment policies’ and has launched an attack against private equity companies as “multinational freeloaders”. ICTU said: “The investment of workers’ retirement savings is an area to which ICTU has increasingly turned its attention. It is no longer sufficient to focus solely on the benefits side of pensions, important as these are, but also on the kind of investments made by our pension schemes. These can have a great impact on workers’ jobs and livelihoods.” The NPRF has also reportedly been called to give evidence to the Irish Parliament’s joint committee on foreign affairs over investments in companies linked to Zimbabwe. According to ipe.com, research from Progressio Ireland, an independent organisation for sustainable development, suggested 3% of the NPRF’s assets, at the end of 2006, were invested in at least 14 companied with operations in Zimbabwe.
The fund has challenged the figures. NPRF is a signatory to the UNPRI and has Hermes Equity Ownership Services (EOS) to vote and engage with companies on ESG issues within its €15.9bn global equity portfolio.
The UK Local Authority Pension Fund Forum (LAPFF), which represents assets of £95bn, says it will continue its campaign to push Marks & Spencer, the UK retailer, to split the role of Stuart Rose as chairman and chief executive, in line with recommendations of the UK Combined Code on Corporate Governance, following the defeat of the proposal at this month’s annual general meeting (AGM). About 22% of shareholders voted against or abstained on the resolution this year, indicating a significant level of shareholder unhappiness.LAPFF said it would refile the resolution at the 2009 AGM.
Melissa Brown is stepping down as executive director of Hong Kong-based ASrIA, the Asian social investment forum, after almost five years in the post. Brown will remain with ASrIA for the next few months and oversee the transition to a new head in October. ASrIA, which has more than 100 member organisations, is currently seeking Brown’s replacement. The application deadline is the 20th August, 2008 and details about the executive director position can be found at: ASrIA link
Ethos, the Geneva-based foundation which looks after CHF2.3bn (€1.4bn) in assets run on a socially responsible basis on behalf of Swiss pension funds, is pushing Swiss regulators to take a vote on whether a new Swiss company law on governance goes far enough in terms of executive pay and incentives. The Swiss Federal Council recently requested an extensive parliamentary extensive revision of Swiss Company Law in order to strengthen corporate governance, ease the rules regarding the structure of the capital, modernise the procedures at general meetings and reform the accounting law. Ethos said that while it welcomed the draft revision, it believed there was potential for improvement regarding shareholder rights to vote on executive pay. The Swiss Committee for Legal Affairs of the Council of States will examine the draft law revision on August 26, 2008. It is expected that the new law could be debated for introduction in Spring 2009.
Gordon Brown, UK Prime Minister, has presented Ben Watson, campaigns assistant at FairPensions, the UK lobbying group for responsible investment by pension funds and fund managers, with the title of ‘London

Social Justice Campaigner 2008’. FairPensions said the award reflected increasing recognition of the potential of investors to be a positive force in improving company financial performance and responsibility.
Investor support for ‘say-on-pay’ votes on executive compensation at US companies is growing, albeit gradually, according to figures published by The Corporate Library, the corporate governance research body.Its research shows that the median shareholder votes for ‘say-on-pay’ proposals rose to 42% in 2008 from 41 percent in 2007 based on the 76 proposals that have come to a vote so far this year. The Corporate Library said ‘say-on-pay’ votes, which are non-binding in the US, received majority support at 15 companies in 2007 and 2008, but only five of those companies had adopted the vote. The report can be purchased at: The Corporate Library
The Sustainable Investment Research Analyst Network (SIRAN) is urging emerging markets companies to adopt the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI). A SIRAN statement, signed by over 40 global institutional investors representing $960bn in assets, said emerging markets companies could benefit sustainability reporting and meet increased expectations of investors. Separately, the GRI has launched the Global Action Network for Transparency in the Supply Chain, an initiative to get multinational companies to support their suppliers in sustainability reporting.
Funds run by Phillip Goldstein and Carl Icahn havebeen the most active participants in hedge fund related US shareholder campaigns during the first half of 2008, according to activism research firm FactSet SharkWatch, reports Financial News. It said Goldstein’s Bulldog Investors and Icahn Associates were each involved in six activist campaigns out of 262 in the six months to the end of June. FactSet SharkWatch defines an activist campaign as going beyond a simple shareholder proposal and publicly agitating for change at an organisation. It said other highly activist hedge fund managers included Stilwell Value, Shamrock Partners, Riley Investment Management and SAC Capital Partners.
The Ecumenical Council for Corporate Responsibility (ECCR) has published a guide to investment and engaging with companies. The 30-page guide aims to support church members, faith communities and other responsible investors in influencing companies on the basis of Christian and ethical values. The report is co-sponsored by EIRIS. Miles Litvinoff, ECCR co-ordinator, said: “The more faith communities and others seek to raise standards of corporate and investor responsibility, the sooner business will fulfil its potential to create value for the world’s poor and marginalised people as well as for those who are already well-off.”
The guide is downloadable from: ECCR Link
Real estate fund managers ING Real Estate, GE Real Estate Europe, Axa REIM, and AEW Europe, owned by French financial group Natixis, are working on a Global Green Rating system for sustainable building practices, according to Innovest.

The companies, which jointly run assets of $250bn, involved said the scheme would assess and benchmark the environmental performance of their existing buildings by rating them according to a number of measurable indicators, including energy and water consumption, waste, carbon emissions and transport links. The rating system is being developed and tested in 15 pilot sites across Europe and could be launched before the end of 2008.
E.Capital Partners Indices (ECPI), the Milan-based ESG index house, has launched a Global Longevity Winners Index based on 36 companies in sectors it says will benefit from increased life expectancy trends in developed countries.
US Congressional investigators have accused UBS, the Swiss banking group, and Liechtenstein’s LGT Group of using bank secrecy laws to help US clients evade billions of dollars in taxes, reports the Financial Times. The allegations are made in a 100-page report released by the Senate permanent subcommittee on investigations.
The $126bn Florida State Board of Administration has approved commitments to timber and infrastructure for up to $1.1bn (€691.6m), reports IPE Real Estate. The pension fund will invest up to $350m in timberland via several commingled funds; the timber assets could be located in either the US or some international markets.Svenska Kyrkans Pensionskassa, the €812m Swedish Church Pension Fund, has handed €26.3m in new global equities money to Sustainable Asset Management (SAM), the Swiss SRI manager and upped investment with Swedish ethical manager Ethos Sverige, reports ipe.com. The funds said the mandates would continue to grow as it reallocates more to responsible investments.
Denmark is joining an increasing number of governments with official policies against trade in non-renewable resources from Western Sahara, according to DanWatch, a corporate watchdog on Danish investment and trade abroad. The Danish position, which could impact on pension fund investments in related companies, echoes the non-trade policies of fellow Scandinavian governments Sweden and Norway. While occupied by Morocco, the mineral rich Western Sahara has been on the United Nations list of so-called Non-Self-Governing countries since the 1960’s.
Trading in carbon markets in the first six months of 2008 almost matched figures for the whole of 2007, according to figures from Point Carbon, the carbon markets research company.
It said carbon trading in the first six months of this year was US$59bn, just below the US$63bn total for 2007. Seventy percent of the total was traded under the EU’s Emissions Trading Scheme, compared with 61 percent a year earlier.

The Carbon Disclosure Project (CDP), the not-for-profit collaboration of 385 institutional investors with combined assets of $57 trillion, has joined with IBM, the IT group, for a research project into carbon management practices at UK companies and compiled a related best practice guide. The findings were drawn from interviews on current and future carbon management plans with UK companies including Aviva, Centrica, HBOS, IBM, Lloyds TSB, Scottish and Southern Energy, Tesco, Thomson Reuters TNT, Unilever and United Utilities. Among the project’s recommendations are that introducing standardised industry methods and processes would make comparison of underlying emissions data between organisations easier. The report also suggests that corporate monitoring and measuring of carbon emissions is important before reduction commitments are made because they highlight areas for improvement and allowing accurate target setting. CDP link*The Prix Pictet* for photographs on sustainability themes has displayed the shortlisted images for the prize on its website (www.prixpictet.com) and is inviting the public to cast their votes for the most powerful and artistic image. The votes will be taken into consideration by the jury when they make their final decision in October 2008.
More than 700 scientific experts from 28 nations gather this week in Brazil at the 8th INTECOL International Wetlands Conference to debate growing concerns that evaporation and destruction of world wetlands could cause them to exhale huge amounts of CO2. Wetlands are estimated to cover about 6% of the world’s land surface, but store 10-20% of its terrestrial carbon. The debate is being organised by the United Nations University.