RI round-up: Nov 6

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

Oxfam and Insight Investment have issued a joint research paper examining the impact that investors could have in reducing poverty globally and at the same time contributing to better investment returns. The report can be found at: link to report
The US SEC is reportedly expected to address new conflicts of interest and disclosure rules for credit rating agencies within weeks, a Securities and Exchange Commission official has told Reuters. Erik Sirri, the SEC’s director of trading and markets, said the agency would require credit raters to disclose more information about how they determine their ratings and address proposals to crack down on conflicts of interests.
Venture capital investment in US clean technology firms reached a record $1.6bn during the third quarter of 2008, up 55% on the previous three months, according to Ernst & Young. Its findings, based on data from Dow Jones VentureSource, show that $3.3bn was invested in the first three quarters of the year, a 71% rise on the figure for the first nine months of 2007.
The study said the level of venture capital investment flowing into later stage firms had risen notably from 36% of the total in the second quarter of the year to 55% for the third quarter. Joseph Muscat, US director of cleantech and venture capital at Ernst & Young, said: “In light of challenging economic times, the US cleantech market may be entering a transitional period,” he said. “However, the structural market drivers of the cleantech sector remain intact, suggesting that the prospect for long-term market development is positive.Factors such as technological advances, consumer demand and programmes at both the federal and state-level help to create the conditions needed for long-term growth in cleantech.” The study said solar investment secured almost all the $1bn invested in the energy generation sector.
Energy efficiency firms also enjoyed a significant rise in investment to $186m during Q3, a 48% increase on the same quarter of 2007.
The Association of Sustainable and Responsible Investment in Asia (ASrIA) has appointed Claire McLetchie as executive director. McLetchie, who recently ran her own investment consulting business in Hong Kong was formerly investment director for Standard Life Investments, Hong Kong, Singapore and UK. She replaces Melissa Brown, former AsrIA executive director who has joined Singapore-based private equity fund of funds manager IDFC to integrate sustainability aspects in the managers fund selection process. AsrIA has also appointed Wai-Shin Chan, a former ESG analyst for JP Morgan in Hong Kong, as development director to look after the association’s training programmes and membership development. David Sheil and Tessa Tennant, ASrIA’s co-founders said:

“With Claire and Wai-Shin, we have two very talented individuals with an exceptional combination of SRI buy and sell-side expertise in Asia. Many people are talking about the New Green Deal as a way forward for the USA and other western economies, this has implications for Asian investors and companies, and we want to maximise the opportunities in this part of the world.”

More than 62% of Dutch companies responding to the first Carbon Disclosure Project (CDP) request say they have introduced carbon reduction strategies. The survey sent to the 50 largest companies listed on the Amsterdam Stock Exchange, received a 52% response. The CDP responses show that 77% of Dutch corporate respondents are addressing climate change issues at Board level and 42% have linked employee incentives to the reduction of emissions. But while 81% of respondents have started to assess the potential financial consequences of climate change related risks and opportunities, the survey showed that few disclosed the financial decisions made in relation to climate change. Only 19% of respondents have set a carbon intensity target and 30% have started to explore carbon-neutrality and the sourcing of renewable energy. CDP is supported in the Netherlands by the Dutch Environment Ministry, VROM, Fortis, APG Investments and Robeco.
The US National Association of Corporate Directors has issued a set of principles it says identify areas that boards, management and shareholders agree should be the basis for good corporate governance such as independent board leadership, protecting against entrenchment of the board, shareholder participation in corporate decision making, and board communication with shareholders.
Link to principles
The UK Social Investment Forum (UKSIF), has published a report examining sustainable investment opportunities in alternative asset classes. ‘Sustainable Alternatives’ looks at the growth in sustainable opportunities in alternative asset classes available to pension funds including private equity, property andinfrastructure. The paper is available at: www.uksif.org/sustainablepensions
P-Solve Asset Solutions, the UK investment consultancy and asset management is expanding its London-based governance business with five new hires. Mark Salter, a former client relationship manager with HSBC Global Asset Management, Nick Davies, former institutional marketing manager- EMEA at DIAM – Mizuho Bank and previously client relationship manager at CCLA, the charity fund manager, and Emma Pugh, formerly of F&C have all been hired as client relationship managers. Chris Windeatt and Sophia Hillard have also joined the Governance business at P-Solve as governance associates.
The UK government has passed the Climate Change Bill, the world’s first legally binding national emissions reduction target, which commits the UK to reducing greenhouse gas emissions by 80% by 2050. Joan Ruddock, UK minister for energy and climate change, said the move would be valuable to shareholders by allowing companies to demonstrate “their green credentials”.
The non-profit Business & Human Rights Resource Centre has launched a free online portal bringing together lawsuits from across the world alleging human rights abuses by companies. The portal summarises in non-legal language over 35 cases and the positions of each side. Cases profiled include a lawsuit against AngloGold Ashanti in South Africa over miners suffering from silicosis and a lawsuit against BHP Billiton in Australia and Papua New Guinea over pollution by its mine in Papua New Guinea. Link to portal

The global financial crisis is the result of, “an enormous mismanagement of funds entrusted by the public to financial institutions”, according to a statement by Transparency International (TI), the anti-corruption organisation. At its 2008 Annual Membership Meeting in Athens, Greece, issued a resolution calling on the leaders of the Group of 20 (G-20) industrialised nations, meeting on the crisis on 14-15 November in Washington D.C., USA, to ensure that “transparency, integrity and public accountability become the foundation of the vital reforms needed to rebuild the world’s financial system.”
Link to resolution
Friends Provident is set to give its 52% stake in F&C Asset Management to its shareholders. F&C is one of the best known SRI managers via its REO engagement overlay product. In a statement the company said: “Friends Provident remains confident about the long term prospects of F&C and through the distribution of the stake, our shareholders will retain their interest in F&C and be able to participate directly in its growth.We also believe F&C will gain certain advantages from being established as a wholly independent third party manager and listed company.”
F&C said its board continued to “explore opportunities” and remained in discussions with firms interested in buying the business.
ETF Securities has listed Europe’s first Carbon exchange traded commodity (ETC) on the London Stock Exchange (LSE) in the dedicated ETC segment. ETCs use a secured, undated, zero coupon note structure giving direct exposure to the carbon emissions allowance futures market.
Pictet & Cie, the Swiss asset manager reportedly plans to launch a new climate change-based fund next year. The new fund, expected to be launched in the first quarter of 2009, will be Pictet’s fourth on the climate change theme, according to Thomson Investment Management News.