RI round up: Oct 9

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

Eric Gelfren, Mercer’s head of European head of responsible investing, is leaving the company. Gelfren’s future plans have not yet been confirmed. Prior to joining Mercer, Gelfren spent 5 years at SAM in Zurich as their global head of marketing and sales.
The €2.8bn Dutch pension fund PNO Media has launched a website dedicated to the fund’s responsible investments to give members more transparency on the approach. Link to site
Investment funds run by Australian superannuation funds and asset managers show a 36% difference between the largest and smallest carbon footprints and an eightfold difference in footprints of the equity investment portfolios, according to joint research between Trucost and the Australian Institute of Superannuation Trustees. The report examined the greenhouse gas emissions associated with 100 equity portfolios of different investment styles: growth, value, sustainability, index, enhanced index, core and small/mid caps. It said that sustainability and growth portfolios tended to be the most carbon efficient, while enhanced index portfolios had the greatest carbon intensity because of their tendency to select more resources, construction and materials, oil & gas and utilities stocks. The report said that the carbon footprint of the ASX 200 index is one-fifth larger than that of the MSCI All World Developed Index. Fiona Reynolds, chief executive of the AIST said it was hoped that the research findings wouldraise awareness among superannuation funds about the relevance of climate change as a fiduciary issue and more specifically help funds identify investment risks and opportunities as Australia moves to implement an emissions trading scheme by 2010: “Supers funds, as owners of Australia’s major corporations, need a greater understanding of how the value of their investments may change under a carbon trading scheme. Super fund members, in turn, are entitled to ask the question: what are the long-term consequences of investing in a carbon-constrained economy and what is my fund doing about this issue?,” said Reynolds. Download the Report at: http://www.trucost.com/pressreleases/CCAIST.html
A pan-African investment index to attract socially responsible capital from private investors and spur growth on the continent to help achieve the United Nations Millennium Development Goals has been launched by the New Partnership for African Development (NEPAD) and Africa Investor. The Ai30 index is based on global best practices in corporate governance, environmental preservation and social development. The index creators were advised by a group comprising the Organisation for Economic Cooperation and Development (OECD), the Johannesburg Securities Exchange (JSE), Investec, the International Finance Corporation (IFC) and Fraters Asset Management.
The number of UK private sector defined benefit pension schemes open to new members fell

by 3% in the past year, according to the National Association of Pension Funds. Its annual pensions survey showed that 28% of DB schemes, with a total of more than two million members, remain open to new entrants, compared to 31% in 2007 and 33% in 2006. The survey revealed that 21% of the DB schemes open to new members were considering switching to defined contribution.
The UK government is to establish a joint government/industry Investment Governance Group (IGG) to update and develop the Myners principles, widely followed as pensions best practice in Europe. As part of his 2001 report, Myners recommended that trustees set out clear responsible investment objectives in a Statement of Investment Principles (SIP), to be sent to members every year. The ten Myners principles focused on areas such as decision-making, setting clear objectives for the fund’s investments and active engagement with investee companies.
Calvert, the US SRI mutual fund manager, has launched the Calvert Global Water Fund, sub-advised by KBC Asset Management in Dublin. The fund will invest in utility, infrastructure, and technology companies active in managing water resources.
Investment in clean technology continues to grow despite the current market crisis, according to a survey of 150 of the world’s largest companies published by Ernst & Young, the consultancy group. The survey found that90% of companies had undertaken climate change initiatives and commit assets to the issue worth $276bn over the next ten years. A separate poll of institutional investors carried out by the company found that over half claim to consider a company’s response to climate change when making investment decisions.
The report also said that more than a third of corporate venture capital programmes planned to up investment in cleantech companies within the next year and 44% plan to increase investments within five years. Ernst & Young said the growth in investment could see cleantech account for 11% of all global venture capital funding this year, up from 1.6% five years ago.
Separately, The Cleantech Group, said the third quarter of 2008 had been a record for cleantech venture capital investment with $2.6bn invested across 158 companies globally, a 37% increase on the third quarter of 2007 and a 17% rise on the second quarter of this year.
F&C Investments has been hired for active engagement services for the Pædagogernes Pensionskasse (PBU), the DKr29.8bn (€4bn) Danish pension fund for primary school teachers, reports European Pensions & Investments News.
Non governmental organizations have called on financial backers of the Kashagan oil field in Kazakhstan, including French bank BNP Paribas, to remedy alleged environmental and health problems caused by offshore exploration at the 13 billion barrel project,

located 20km off the northern Caspian Sea coast. In a letter to banks including BNP Paribas, which is one of the lead financiers of the project, the NGOs claimed the banks risked breaching the Equator Principles on responsible lending because the oil field could endanger local marine wildlife and pose serious human safety risks.
APG Investments, the asset manager of the ABP pension fund, and a noted proponent of responsible investment, could reportedly seek to add pension scheme clients in Latin America and southern Europe, according to Roderick Munsters, its chief investment officer. European Pensions & Investments News reports that Munsters told a conference in The Hague that both regions offered interesting growth potential for the manager.
The Climate Group, a London-based non-profit organisation dedicated to advancing business and government leadership on climate change, is working with a group of major international financial institutions to develop a comprehensive global framework for the sector’s response to climate change. The new framework will guide operational greenhouse gas (GHG) emission reduction commitments and provide strategic direction across investment research, asset management, retail banking, corporate banking, insurance and re-insurance, investment banking and project finance. For further information, contact lbird@theclimategroup.org*A campaign, which included pressure from faith–based and socially responsible investors* has led Wal-Mart, the US supermarket giant to cease sourcing cotton and cotton materials from Uzbekistan in an effort to persuade the Uzbek government to end the use of forced child labour in cotton harvesting. The campaign received major input from the Interfaith Center on Corporate Responsibility (ICCR), a coalition of nearly 300 faith-based institutional investors, representing over $100 billion in invested capital and the As You Sow Foundation, a non-profit organization that utilizes capital markets to transform corporate behaviour. Rev. David M. Schilling, program director of the ICCR, said: “Wal-Mart has played a positive role in crafting a common strategy along with other stakeholders to end this egregious violation of children’s rights. We urge other companies to tell their suppliers to no longer purchase Uzbek cotton until the practices change, and to start requiring the country of origin of raw cotton fiber listed on all paperwork.”

Charlie McCreevy, European Commissioner for internal markets, is set to unveil proposals for the regulation of credit ratings agencies unless they came up with suitable proposals to counter what officials see as a conflict of interest in their remuneration by financial market players. McCreevy said he would present his “ideas for regulating credit rating agencies” within the next few weeks.