RI round-up Oct 29

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

The Responsible Investment Association Australasia is seeking a membership and program manager. The application closing date is Friday 30 October.
Link to RIAA site
Trillium Asset Management, the US SRI house, has named Matthew Patsky as its new chief executive, taking over the role of company founder Joan Bavaria, who died last year. Patsky was most recently director of research at Winslow Management in Boston, where he ran the Green Solutions Strategy and the Winslow Green Solutions Fund. Trillium was founded in 1982 and manages around $900m (€599m) in assets for institutional and individual clients.
The first four Swedish National Pension buffer funds (AP1, AP2, AP3 and AP4) are looking for a provider of a global voting service. The four funds have issued a tender notice, which follows on, from the setting up of pilot project earlier this year. It was used to vote at the annual meetings of 300 foreign companies on issues such as international initiatives and ESG.
Under the project, each fund made its own decision for each individual company, and a Swedish corporate governance consultancy then administered the votes and a UK consultancy provided the electronic voting platform.
The environmental arm of Ecofin, the London-based fund manager, has sold its majority stake in Israeli solar energy firm Solel to Siemens for $418m (€278m). Ecofin Water & Power Opportunities first bought a stake in Solel, which makes gear for solar thermal power plants, in January 2008 before eventually taking its stake to 63%. The transaction is expected to complete by the end of 2009. Ecofin’s shareholders include pension funds such as the Superannuation Scheme of the University of London, the BBC Pension Trust and the P&O Pension Scheme, according to filings.Ethos, the sustainable advisory firm owned by Swiss pension funds, has teamed up with banking group Raiffeisen on shareholder voting rights. Under the deal, the Raiffeisen Pension Invest Futura 50 Fund’s voting rights will be exercised in accordance with Ethos’ recommendations for Swiss companies. The fund also uses consultant INrate’s input on environmental and social criteria. The Pension Invest Futura 50 Fund meets the investment guidelines for social security institutions and invests worldwide in the shares, bonds and money market securities of major corporations meeting strict sustainable development criteria.
A new $2.5bn (€1.7bn) joint venture between Malaysian sovereign wealth fund 1MDB and PetroSaudi International plans to target renewable energy. PetroSaudi and 1Malaysia Development Berhad announced their partnership last month, hailing a “new era of economic cooperation” to spearhead the flow of foreign direct investments from the Middle East. The two said the joint venture aims to “seek, explore, and participate in business and economic opportunities which result in the enhancement and promotion of the future prosperity and long-term sustainable economic development of Malaysia”. They added: “It is expected to actively make investments in the renewable energy sector.”
Prudential Financial has changed tack about adopting a shareholder proposal on directors’ pay. The move is being heralded as a victory by activist group United for a Fair Economy’s Responsible Wealth project, whose “say on pay” proposal received a 61.5% majority at Prudential’s annual meeting in May – despite the company advising shareholders to vote against the motion. Prudential has announced that its board has now approved a motion for the 2010 AGM for shareholders to cast an advisory vote on the overall executive compensation policies and procedures employed by the compensation committee for Prudential’s named executive officers every other year.

SAM, the Swiss sustainability fund manager, has launched the SAM Sustainable Water Evolution Strategy, investing in small and micro-cap companies in emerging markets that operate with new, water-related technologies. The fund will seek business opportunities generated by global water challenges, particularly in India and China.
France’s Schneider Electric has launched a new socially responsible energy access fund with the backing of Groupe Banque Populaire’s Crédit Coopératif arm. Schneider said the €3m global socially responsible venture capital fund would be called Schneider Electric Energy Access. Its mission is to support the development of entrepreneurial initiatives worldwide that will help the financially poorest to obtain access to energy. Crédit Coopératif’s in-house investment manager Ecofi Investissements is an ethical and solidarity-related specialist which has almost €9bn in assets under management.
Foresight Group, the UK-based alternative assets manager, has appointed James Samworth as investment manager of its environmental investment team. Samworth spent 10 years at steel company Corus and has investment experience within banking and private equity in the environmental, natural resources and industrial sectors, gained at Deutsche Bank, Lyceum Capital Partners and Next Wave Ventures. Foresight manages approximately £200m (€213.6m) across a number of funds, including limited partnerships, Enterprise Investment Schemes and Venture Capital Trusts.
PricewaterhouseCoopers has named Malcolm Preston as its new global sustainability and climate change network leader. He will expand his role from its current UK remit to head the firm’s 800-strong Sustainability and Climate Change group. The move follows the acquisition this year of Sustainable Finance Ltd. The firm also said that Celine Herweijer will lead its risk modelling and adaptation services to identify the threats and opportunities arising from climate change. She previously worked with the United Nations as a lead climate analyst in the Water and Energy Branch.The US National Venture Capital Association (NVCA) said investment in clean tech attracted $898m in the third quarter of 2009 – up 89% over the previous quarter. But the figure was down on the $1bn attracted in the same period of 2008. NVCA said the number of deals completed in the third quarter increased 16% to 57 deals compared with 49 deals in the second quarter. NVCA president Mark Heesen added: “Venture capitalists are becoming increasingly focused on industry sectors which require multiple rounds of financing for an extended time horizon.”
George Soros has said he plans to invest $1bn in clean energy technology as part of a bid to fight climate change. Soros said: “I will look for profitable opportunities, but I will also insist that the investments make a real contribution to solving the problem of climate change.” Soros said he would form and fund a new climate policy initiative based in San Francisco with $10m a year over 10 years. “The science is clear, what is less clear is whether world leaders will demonstrate the political will necessary to solve the problem, ” he said.
Proposals by Norges Bank Investment Management, the €290bn ($432bn) manager of the Norwegian Government Pension Fund, to force UK corporate directors to be re-elected every year have met with a cool response from its UK peers. UK institutional investors such as Hermes and the Universities Superannuation Scheme, said such a move would be short-termist and distracting – although Legal & General Investment Management has called on directors to be subject to yearly votes.
The UK Local Authority Pension Fund Forum (LAPFF), which has 49 local authority pension schemes members and around £80bn (€85.7bn) in assets, has put out a tender seeking a third-party provider to promote and assist its shareholder activism. LAPFF currently employs PIRC as its research and engagement partner. The £1.5m contract is set to run out in April next year. The re-tendering is being conducted by Wolverhampton City Council on behalf of LAPFF.

ClimateWise, the global collaboration of leading insurers launched by HRH the Prince of Wales in 2007 to focus on reducing the risks of climate change, has called on developed countries to agree to a 40% cut in emissions by 2020 at the UN climate change negotiations in Copenhagen in December. The group also called for the forthcoming negotiations to reach agreement on the size and structure of the financing package to help the developing world tackle climate change, as well as on all countries to implement plans to systematically reduce the climate risks they face.
Many Brazilian companies are failing to adequately address the issue of sustainable sourcing of raw materials, according to a report from the United Nations Environment Programme Finance Initiative, conservation charity Fauna & Flora International and Brazilian business school, Fundação Getulio Vargas. The report evaluates 31 multinational and Brazilian companies in the food, beverage and tobacco industries against an ecosystem services benchmark.
Link to report
Impax Asset Management Group, the specialist environmental investment manager, has made the largest initial public offering (IPO) on the London Stock Exchange since July 2008 after investors placed £104.5m with subsidiary Impax Asian Environmental Markets. Allan McKenzie, former chief operating officer and a managing director of Blackrock International Limited prior to retirement in 2006, has been named as chairman of the new subsidiary.
A guide on reporting environmental issues in corporate annual financial statements has been jointly launched by The Institute of Chartered Accountants for England and Wales (ICAEW) and the Environment Agency. Recent changes to UK company law have clarified the position on reporting environmental performance for many large and listed companies.US foundations have boosted their commitment to socially responsible ‘mission investing’, according to a new report. The More for Mission network surveyed 39 foundations and found that mission investments represented almost 5% of total assets at the end of 2008. The network is affiliated with the Boston College Institute for Responsible Investment and comprises 58 foundations representing $30bn (€19.9bn).
The European Commission is proposing to “significantly increase resources” to the new Marguerite Fund for climate change projects. The fund was launched in September by a group of long-term investors to invest in environmental, energy and transport infrastructure in the European Union. Backers include France’s Caisse des Dépôts, Italy’s Cassa Depositi e Prestiti, Germany’s DfW and the European Investment Bank. It aims to raise €1.5bn by the end of 2011, with a €750m first closing expected before the end of this year. A recent report: “Investing in the Development of Low Carbon Technologies”, says investment in the EU has to increase from the current €3bn per year to around €8bn per year – or an additional investment, public and private, of €50bn over the next 10 years. Wind energy, it said, would require €6bn, solar €16bn, electricity networks €2bn, bio-energy €9bn, carbon capture and storage €13bn and nuclear €7bn.
Link to EU report
Edinburgh-based venture capital firm Par Equity is joining up with energy consultancy Senergy to launch a £50m (€54.4m) investment fund for renewable power sources, to be aimed at institutional investors. The Par Sustainability Fund 1 will begin raising cash early next year, focusing on companies involved in onshore and offshore wind and geothermal technologies, waste-to-energy and recycling – primarily in Scotland, according to Par’s website.

A UK government report has criticised Vedanta Resources over a controversial mining project in Orissa, stating that “a change in the company’s behaviour is essential”. Vedanta was blacklisted in 2007 by the Norwegian Government Pension Fund.
Responding to a complaint submitted by Survival International, the NGO, the UK National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises said Vedanta had failed to put in place an adequate and timely consultation mechanism to engage the Dongria Kondh, an indigenous community whose health and environment would be directly affected by the company’s plans to construct a bauxite mine in the Niyamgiri Hills in Orissa. Following pressure from activists, the Church of England’s Ethical Investment Advisory Group has reportedly agreed to meet the management of Vedanta Resources to assess whether it should continue to stay hold a £2.5m stake in the company, although a decision has yet to be made public.
Two-thirds of a sample of 30 insurance companies operating in The Netherlands do not have a responsible investment policy, nor are taking steps to implement one, according to a benchmark survey by The Dutch Association of Investors for Sustainable Development (VBDO), and research bureau Profundo. Just 9 of the 30 said they had a responsible investment policy.
The complete report (in Dutch only) is available on the VBDO website: Link to site
Peter Butler, CEO and founding partner of Governance for Owners, has reportedly said companies and institutional pension and saving funds should be made to pay a levy to support effective shareholder engagement in to tackle the ‘free rider’ issue – where non-active shareholders benefit from governance improvements secured by more engaged investors. Butler told ipe.com: “We won’t solve the problem of the lack of institutional shareholder engagement until we do something about the free rider issue, and the only way to tackle that is to enforce engagement as a fiduciary duty and create a pot of money to ensure that there are enough suppliers of governance services out there for those investors unable to do it themselves.”A lobby group of 43 investors and investment-focused organizations representing over $16bn in assets has written to 14 top US companies including Ford and Boeing urging them to end what they said was a “glaring contradiction” between their own policies and the U.S. Chamber of Commerce’s and National Association of Manufacturers’ (NAM) positions on pending climate legislation. Each of the companies has publicly stated that it supports action on climate change, which the Chamber and NAM strongly oppose. The investors say this “misalignment of positions” poses serious business and reputational risks to the companies.
The Sustainable Investment Institute (Si2), a new Washington, DC-based non-profit research organization, backed by leading colleges and universities including Harvard and Yale, is partnering with Proxy Governance to share data and information and sell bundled products. Si2 is also partnerning with IW Financial for ESG portfolio screening and analysis
90% of wealth managers said their RI portfolios had performed the same or better than other portfolios, according to a survey of readers of WealthBriefing by EIRIS in association with Kleinwort Benson, It also also found that the financial crisis had made 30% of respondents more likely and 60% just as likely to offer responsible investment products to their clients.
Paul Myners, UK Financial Services Minister has called for the establishment of an independent council for institutional investors to speak on behalf of pension schemes and other asset owners. Myners said: “I am struck by the absence of a body in the UK that speaks on behalf of institutional investors without a commercial or trade association interest.
KBC Asset Management has appointed Catherine Ryan to its Environmental Strategies team as fund manager (water). Ryan had previously managed the group’s Irish equity portfolio. The nine-person team has over $1.6bn of assets under management.