RI round-up: Nov 19

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

NASDAQ OMX Group, the US exchange house, and GES Investment Services, have launched the first Nordic region sustainability index – the OMX GES Sustainability Index. The index comprises the 50 leading Nordic listed companies in terms of sustainability based upon international guidelines for environmental, social and governance (ESG) issues. The assessment is conducted by GES, which already calculates a Swedish sustainability benchmark for NASDAQ OMX.
The £1.5bn (€1.9bn) Environment Agency Active Pension Fund has been named best investor in environmental, social and governance (ESG) issues in Investment & Pensions Europe magazine’s ESG Leader Awards. The award for best ESG consultancy/research house was won by Innovest. Mercer, the investment consultant picked up the award for best ESG innovation. The United Nations Environment Program Finance Initiative (UNEP FI) won the outstanding contribution to the development of ESG award and Sustainable Asset Management (SAM) was named best asset manager investing in ESG.
Goldcorp Inc, the Canada-based global mining group, has agreed to produce a human rights impact assessment (HRIA) of its Marlin Mine site in Guatemala after shareholder engagement from a coalition of investors including Sweden’s AP pension funds and Canadian pension funds and investment managers including the Ethical Funds company. The investors said the mine, had been a site of human rights concern. They said they hoped the HRIA, which will be overseen by a steering committee comprised of representatives from a local Guatemalan NGO, the shareholders and the company, could set a precedent for the mining industry. The HRIA will be overseen by a steering committee comprised of representatives from a local GuatemalanNGO, the shareholders and the company. Link to further info at SHARE
The International Business Leaders Forum, International Finance Corporation (IFC) and the UN Global Compact have launched the “integration process”, specifically for companies that want to integrate human rights issues into their existing environmental and social impact assessments. For further information, contact: Desiree.Abrahams@iblf.org
Matthew Kiernan, CEO and founder of Innovest has published a new book: “Investing in a Sustainable World: Why Green is the New Color of Money on Wall Street”.
UNEP FI and the Global Reporting Initiative (GRI) have launched the final version of the GRI Financial Services Sector Supplement, a set of indicators for reporting the environmental and social performance of financial products and services. For more information: Follow link
Bank Sarasin has published a new report from its Sustainability Research team entitled: “Solar energy 2008 – Stormy weather will give way to sunnier periods”. The report compares and assesses the prospects for technologies, markets and companies in the field of solar energy, and for the three main fields of application: photovoltaics, solar thermal energy and concentrating solar power.
UBS, the Swiss banking group, has laid down a new 2009 executive remuneration system including a “bonus-malus” test and a stipulation that bonuses will be conditional on achievement of risk-adjusted performance targets tested over several years. Ethos, the Swiss responsible institutional investor group, welcomed the new framework, including a new shareholder vote clause which it had lobbied for, but said it regretted that the new system sets no overall bonus limits and could also still allow so-called ‘golden hello’ payments.

FTSE Group has added nine new sector-specific indices in water, renewable energy, energy efficiency and waste and pollution to its FTSE Environmental Opportunities Index Series. The benchmarks include companies with at least 20% of their business derived from environmental markets and technologies. Constituents are researched by Impax Group, the specialist environmental investment company.
The performance of green and ethical funds has held up well during the credit crisis, according to research by Citigroup Global Markets. It found that more than 40% of funds questioned had outperformed their index while 30% had stayed in line. Citi said two-thirds of green and ethical funds said they were still seeing inflows from investors despite the market downturn.
About 80% of the world’s largest companies listed on the FTSE All World Developed Index face significant and unmanaged environmental, social and governance risks, according to research from Eiris, the ESG research house. The report: The State of Responsible Business in 2008: Implications for PRI signatories, found that globally only 10% of companies in very high impact sectors had adopted a good or advanced response to climate change risk. It said around a quarter of companies faced high exposure to human and labour rights risks, but only 10% of these companies had adopted relevant good practices in their supply chains. Link to report
Bridges Ventures, the London-based social venture capital firm, has launched the Bridges Social Entrepreneurs Fund. The fund has so far raised £4.25m including seed capital from the UK National Endowment for Science, Technology and the Arts. Other founder partners to the fund include Sir Ronald Cohen, Nigel Doughty, Harvey McGrath, Apax Foundation, TheGeneration Foundation, Lehman Brothers Foundation Europe, Deutsche Bank and 3i.
Robeco, the Dutch fund manager, has launched a new private equity fund of funds, Robeco Responsible Private Equity II (the ‘Fund’). The fund, which will be diversified across 20-30 private equity funds, centres around engagement, through which private equity funds managers are stimulated to improve the environmental, social and governance (ESG) performance of their portfolio companies. The fund’s target size is €250m with Robeco acting as cornerstone investor with 15% of the fund.
APG Investments, asset manager to Dutch pension fund ABP is seeking two Amsterdam-based senior sustainability specialists, one for real estate and infrastructure, the other for engagement.
Link to job adverts
Newton Investment Management, part of BNY Mellon Asset Management, has hired two senior investment research analysts with SRI responsibilities. Amanda Young joins from CCLA Investment Management as SRI officer while Laura Aarnio joins from PIRC with responsibility for corporate governance issues. Both will report to Campbell Watterson, Newton’s leader of investment process.
KLD Indexes in the US and Jantzi Research in Canada have launched the Global Environment 60 Index (GE60) of 60 pure-play companies generating more than 50% of their revenues from products or services related to environmental themes. Toronto-based fund manager, Claymore Investments, has said it will launch a related exchange trade fund based on the GE60. The five environmental themes of the index are alternative energy, clean technology, sustainable water, green building and pollution prevention.

Watson Wyatt, the global investment consultant, has issued a report examining how the shift to a sustainable low-carbon economy could present risks and opportunities for commercial real estate investors. Jane Goodland, investment consultant at Watson Wyatt, said: “We believe sustainability will have more influence on investment returns in future, impacting rental values, vacancy periods, capital expenditure and capital values. We therefore encourage long-term investors to assess the sustainability performance of their real estate portfolios and incorporate sustainability considerations into decisions about acquisition, management and sale of real estate assets.” Link to report
The Dáil, the Irish parliament, is seeking to introduce legislation that would prevent the National Pensions Reserve Fund (NPRF) and any other state body from investing in cluster munitions and anti-personnel landmines, reports ipe.com. The government said that while The Cluster Munitions and Anti-Personnel Mines Bill 2008 did not specifically refer to NPRF investments, this would be rectified through later amendments to the bill.
The International Corporate Governance Network (ICGN), whose members manage about $15 trillion in assets, is demanding tougher transparency rules on short selling. It said companies and shareholders should be informed when significant short positions are being built by investors.
Mercer, the global investment consultant, has teamed up with Trucost, the London-based environmental research group, to sell clients a ‘carbon footprint’ analysis of their portfolio/s, which they can compare to a chosen benchmark, such as the FTSE All-Share, S&P 500 or Russell 1000. Mercer will also develop ‘carbon footprint’ analyses via use of London-based Style Research’s Portfolio Analyzer (SRPA) which integrates Trucost data provider.A €233m bond designed to raise capital for projects that aim to reduce climate change has been sold in a joint project by the International Bank for Reconstruction and Development, part of the World Bank, and Sweden’s Skandinaviska Enskilda Banken (SEB). SEB was sole lead issuer on the six-year bond, reports Financial News, with Credit Suisse acting as senior co-manager and Landesbank Baden-Württemberg acting as co-manager for the transaction. It said the bond was issued following demand from Scandinavian investors.
UBS, the Swiss investment bank has bought a minority stake in GovernanceMetrics International (GMI), the corporate governance research and ratings firm. Under the deal, UBS analysts will use GMI’s research to factor governance ratings into their stock research, The Swiss bank said it would also work with GMI to expand its customer base and develop joint products and research ideas. Other minority investors in GMI include State Street Global Alliance, a partnership between Boston-based State Street Global Advisors and Dutch pension giant ABP.
China’s Industrial Bank has become the country’s first financial institution to sign up to the Equator Principles, the voluntary code for managing environmental and social risk in project finance deals. More than 60 financial institutions have now adopted the principles, and they are estimated to arrange about 85% of project financing worldwide. www.equator-principles.com
US and Canadian female chief executives lag their male peers in total compensation, according to the Corporate Library’s 2008 CEO Pay Survey. The study finds that while female chief executives receive higher base salaries than their male counterparts, the addition of cash bonuses, perks and stock compensation makes female CEO pay packages only 85% of male CEOs’ total actual compensation at the median: $1,746,000 compared to $2,049,000.The study examined compensation data in 3,242 U.S. and Canadian companies. www.thecorporatelibrary.com