E+Co, the US venture capital firm that funds small and medium enterprises that supply clean, affordable energy to households, businesses and communities in developing countries in Asia, Africa and South America, has won the inaugural Sustainable Investor of the Year award at the Financial Times’ Sustainable Banking Awards. Runner-up was Sustainable Asset Management in Switzerland. Responsible Investor magazine is a supporting partner of the awards, which recognise banks and other financial institutions that have shown leadership and innovation in integrating social, environmental and corporate governance considerations into their operations. Five groups were shortlisted for the award including F&C’s global and sustainable investment team, the Calvert Social Investment Foundation in the US, and Aavishkaar India Micro Venture Capital Fund, which provides micro-equity funding of $20,000 to $500,000 to entrepreneurs and ventures helping local communities in rural and semi-urban India.
Banco Real of Brazil was named as Sustainable Bank of the Year.
A third of FTSE 100 companies have inadequate or weak environmental reporting records – a number that has remained virtually unchanged since 2003 – despite major improvements by companies in formulating environmental policies, according to the annual survey from Ethical Investment Research Services (EIRIS). EIRIS said the number of companies it rated as“exceptional” on environmental policy had risen from 4% in 2003 to 16% in 2007. The number it rated as “inadequate” on environmental policy also fell from 9% to 5% over the same period. The records of FTSE 100 companies operating in countries of human rights concerns have also improved, with 94% having a clear policy in 2007, up from 89% in 2003.
Stephanie Maier, Head of Research at EIRIS said: “Our research shows encouraging signs of improved corporate responsibility practices amongst the UK’s biggest companies. ESG issues offer both challenges and opportunities for companies. Through active engagement, responsible investors can play a key role in encouraging businesses to adopt more responsible practices, and are well placed to benefit from best practice”.
The full report can be downloaded: here
Pension funds need more “legal certainty” over how socially responsible investing affects their fiduciary duty, according to a study commissioned by ASSET4, the Swiss research and the German government. The study, titled ‘Long-term and sustainable pension investments: a study of leading European pension funds’, by Dr Axel Hesse, an independent researcher, based on interviews with 10 of Europe’s largest pension funds and asset managers with more than €460bn assets under management, said investors had also identified a clear need for “materially important sustainability information”. Link to report
The United Nations Principles for Responsible Investment (UN PRI) board needs to create a public reporting system on the adoption of responsible investing policies to avoid the process becoming just another box ticking exercise, according to Rory Sullivan, head of investor responsibility at Insight Investment in London. Australian newspaper Financial Standard, reported that Sullivan told a conference in Australia: “How do we set up the structures where we can tell whether companies are doing it? The big contribution PRI could make is publicly ranking evaluating fund managers on what they do. If they did that, PRI could make a substantial contribution. If it doesn’t, I fear it could become another initiative that could run out of steam in a couple of year’s time or it becomes a tick box exercise.”
The first Swiss-denominated sustainable convertible bond on the SWX Swiss Exchange has been launched by Sustainable Performance Group in Zurich-based. Sustainable Asset Management (SAM), the Swiss SRI fund manager, advised SPG in its investments, which will focus on water, energy, resource efficiency and healthy living. The bond has a maturity period of five years.
The Dutch government is carrying out a review of its Tabaksblat corporate governance code on shareholder rights, which looks likely to introduce a put-up or shut-up clause into Dutch takeover laws. The code, launched in 2004, aimed to even out the balance of power between shareholders and Dutch company boards. The review comes after a number of controversial shareholder activism cases in the Netherlands including the recent legal battle started between ASM International, the Dutch semiconductor equipment company, and Hermes, the UK fund manager, over the company’s management strategy. Other proposals in the review include increasing fromone to three per cent the number of shares that an investor must hold before being able to place a resolution on the company’s AGM.
George Soros, the billionaire investor has told a US congressional committee that “a bubble in the making” is under way in oil and other commodities due in part to large inflows by institutional investors into the commodities futures market. Soros said: “The institutions are piling in on one side of the market and they have sufficient weight to unbalance it. If the trend were reversed and the institutions as a group headed for the exit as they did in 1987 there would be a crash.”
The European Trades Union Congress (ETUC) says hedge fund and private equity managers are trying to undermine EU attempts to regulate their investment. A European Parliament report by MEP Poul Nyrup Rasmussen, has called for EU-wide rules on registration and authorisation of hedge fund and private equity managers as well as appropriate leverage levels and increased transparency.
John Monks, General Secretary of ETUC, said: “This self serving lobbying by the industry was to be expected. But regulation of hedge funds and private equity is crucial. We must also focus on tax. These deals are often based on tax breaks designed originally to boost investment in real things, not mergers and acquisitions.”
A report by Punter Southall, the UK actuarial firm, claims that the current surge of pension fund buyouts is unsustainable and temporary.
The report claims that temporary discounts from insurers, estimated by Punter Southall to be up to 10%, are distorting the market in the short-term, but in the long-term these discounts will not continue as the insurers are offering these simply to build their business profile and gain market share.
Group 4 Securicor, the UK-listed security services company, has been blacklisted by KLP Investment Management, the Norwegian pensions insurance company, over allegations of the violation of labour rights. KLP said Group 4 Securicor had been accused of flouting labour rights in twelve countries. Jeanett Bergan, head of responsible investments at KLP, said: “Official sources such as ILO and national courts have confirmed the violations in at least five countries, namely Indonesia, Israel, Mozambique, Malawi, and the US.”
KLP, which has an exclusion list of 50 companies, has reinstated French company AWB, which it blacklisted following allegations of corruption in connection with the UN Oil-for-Food programme. KLP said the company has now taken appropriate measures to prevent similar future incidents.
The $28.3bn Arizona State Retirement System and the $7bn Arizona Public Safety Personnel Retirement System, will divest holdings in companies that do business in Iran under a law signed by Arizona Gov. Janet Napolitano, reports Pensions & Investments. The law gives the two funds and the state treasurer’s office 180 days to identify companies with ties to Iran. Arizona joins 12 other states with Iran divestment laws.The CPP Investment Board, which runs C$123bn for the Canada Pensions Plan, has hired ESL Investments, Knight Vinke Asset Management and ValueAct Capital to run C$1.2bn in activist mandates to engage public companies on long-term performance issues. CPP said the strategy would likely expand in 2009. The fund manager has also has opened an office in London to enable greater access to investment opportunities in the United Kingdom and Europe.
The Ecumenical Council for Corporate Responsibility (ECCR) is calling on UK and Irish church investors, trades unions and pension funds to support calls for Royal Dutch Shell to accept an offer from local residents in Rossport, County Mayo, Ireland, to relocate an onshore gas refinery to an uninhabited coastal site. Five residents were imprisoned for 94 days in 2005 for defying a Dublin high court order forbidding them from interfering with Shell’s engineering works, following plans by Shell and consortium partners, including Norway’s Statoil, to bring unprocessed gas ashore for refining inland at Bellanaboy, a location on peaty terrain which residents claimed could involve major health and safety risks.