Ethos, the Swiss sustainable investment foundation says it could pursue legal action to force a special audit into risk management at UBS, the Swiss bank. Ethos corralled 45% shareholder support for the proposal at last week’s emergency general meeting over $13.7bn (€9.6bn) losses as a result of the US sub-prime mortgage crisis. Dominique Biedermann, Ethos executive director, said. “The Board of Directors of UBS should take the necessary measures in order to restore clients’, employees’ and investors’ confidence as soon as possible.” Swiss Law stipulates that shareholders who hold shares of at least CHF 2m in nominal value have the right to request the conduct of a special audit from a judge.
Peter Montagnon, chairman of the International Corporate Governance Network (ICGN) has warned against regulation to restrict sovereign wealth funds’ investments and urged pension funds and investors to view their emergence as an opportunity for cooperation on responsible investment, reports Thomson Investment Management News.
Montagnon told delegates at a conference in Sweden: “The ICGN would encourage them (sovereign wealth funds) to work together with these institutions to secure value through responsible approaches to share ownership, including dialogue with investee companies on strategy and governance and considered voting at general meetings.” He invited sovereign wealth funds to adhere to the ICGN’s Statement on Shareholder Responsibilities. Last week, the European Commission proposed that EU leaders endorse a common EU approach to increasing the transparency, predictabilityand accountability of sovereign wealth funds ahead of its Spring European Council on March 13-14.
Canada’s National Union of Public and General Employees, says it will use the muscle of about C$100 billion (US$101 billion) in affiliated pension assets to challenge what it believes are excessive executive pay packages of chief executives at Canadian companies. Larry Brown, NUPGE national secretary-treasurer, said: “We will be encouraging our trustees to raise this issue with their plan’s investment managers. We are concerned that the compensation for Canada’s CEOs and other top executives has gotten way out of line. Our members’ pension money is invested in these companies, and the amount being diverted to corporate compensation is having a negative effect on the value of their investments.” Canada needs a say-on-pay article
The United Nations Environmental Programme Finance Initiative (UNEP FI) and the Ecobanking Project
are launching an online database of information about risks faced by financial institutions over environmental and social risks. The database, the Environmental & Social Responsibility Observatory (ESRO), will also highlight financial operations that have embraced the opportunities offered by climate change, water/sanitation, and biodiversity & ecosystem services.
UNEP FI’s E-learning Course on Climate Change will run from three weeks from June 2-23. The course aims to help institutions better understand the basics of climate change and its effects on economic systems,financial sectors, greenhouse-gas markets, carbon finance, cat-bonds and weather: Click here for details
Shareholders in Royal Bank of Canada have voted
42.13% in favour of an annual non-binding shareholder vote on executive pay, according to the Shareholder Association for Research and Education, which works with pension funds and other institutional investors on corporate governance and social responsibility issues.
US public pension fund trustees are walking out of board votes rather than risk being charged with conflicts of interest under a court ruling adopted in California, reports Pensions & Investments. The ruling by the California Court of Appeal in the case of Lexin vs. Superior Court, found that trustees can be criminally liable if they approve a contract that tangentially provides them a personal benefit.
The US House of Representatives has voted to extend a package of green energy tax credits. Under the legislation, which still has to pass through theSenate, $18bn of tax breaks for big oil companies would be scrapped to help pay to broaden an exisiting tax credit scheme for wind, solar, geothermal and biofuel projects. A coalition of 120 investor groups, corporations and NGOs is urging Congress to pass the Renewable Energy and Energy Conservation Tax Act of 2008.
Lord Stern, the economist behind the UK Treasury’s influential Stern Review, is to lead The Centre for Climate Change Economics, a joint venture by The London School of Economics and the University of Leeds. The research centre is backed by a £5m grant from the Economic and Research Council. Venture capitalists invested a record $3bn (£1.5bn) in clean technology deals last year, according to data from Dow Jones Venture Source. The investment was spread across 221 deals and marked an increase of 43 per cent on the $2.1bn invested in 173 clean tech deals in 2006.The Investment Property Databank (IPD) has launched a global initiative to help real estate owners measure and understand the environmental impact of the buildings they own, saying such data will become a component of future real estate pricing and legislation, reports IPE Real Estate. The initiative was launched by IPD, Barclays, Bureau Veritas and CB Richard Ellis, with the support of 20 major corporations and the UK’s Confederation of Business and Industry (CBI), in the hope all companies will eventually publish their findings within corporate reports. The downloadable IPD environment code is designed to measure the carbon emissions of any type of building through the collection of ‘core measures’ – looking at energy, water and waste usage – along with ‘qualitative measures’, and then track and assess a building’s environmental status and make changes to improve that status if it is considered appropriate.
The Green Building Council of Australia has released a report, Valuing Green, which considers how green buildings affect property values and recommends valuation methods. The report is freely available for download only until Friday 7 March and will then only be available to GBCA members. Download report
Labour members of the UK Parliament are pushing for legislation to give extra protection to staff whose employer is taken over by a private-equity buyer. The bill would extend TUPE regulations, under which the buyers of a company must retain existing staff under the same terms and conditions, to private equity buyouts. At present, TUPE rules do not cover situations where the shares, rather than the company itself, change hands
Impax Asset Management is reportedly planning to launch a new open-ended investment company (OEIC)
focused on environment leaders in alternative energy, water technologies and pollution control.
Investors backed clean energy companies and projects to the tune of $148.4bn in 2007, according to revised figures from New Energy Finance. The figure was up 60% from 2006.
The global carbon market will grow by 56% in 2008 against 2007 levels to reach 4.2 billion tonnes of carbon credits traded, predicts Point Carbon, the Oslo-based analysis company. It said the predicted rise would value the market at €63 billion ($95.1 billion). Its Outlook for 2008 report said the EU Emissions Trading Scheme (ETS) would account for the largest share of the market and could be worth €46 billion by the year end.
UK retail investors had £8.9bn placed in green and ethical retail funds by the end of 2007, according to figures from EIRIS, the London based non-profit sustainable investment research company. It said the figure represented almost three quarters of a million ethical fund accounts, a huge rise from 137,000 accounts in 1997 when less than £1.5bn was invested ethically. There are now almost 100 green and ethical funds available to UK investors. The figures were published ahead of the UK’s first National Ethical Investment Week (18-24 May), which aims to encourage consideration of green and ethical options for investment.
Swiss Re faces a class action lawsuit in the US for allegedly making ‘false and misleading’ statements on its financial situation, reports Thomson Investment Management news. Coughlin Stoia Geller & Robbins, theNew York-based law firm said it had filed the suit on behalf of an unnamed institutional investor. The suit alleges that Swiss Re failed to disclose that its Credit Solutions unit had written two credit default swaps that exposed the company to significant financial risk and which caused its share price to drop when the news became public.
ITM Power, a developer of low-cost hydrogen technologies was presented with the award for Excellence in the Field of Environmental Technology Research by H.S.H. Prince Albert II at the CleanEquity 2008 awards in Monaco. The awards, organised by London boutique investment bank, Innovator Capital, were attended by about 300 delegates, including representatives from family offices and specialist investors. Zenergy Power, a superconductive materials company, won the award for environmental technology development, while a third award for commercialisation was won by Clean Diesel Technologies.
Capital Innovations has hired Dr. Jun Lee to its research department for institutional clean technology and infrastructure investments.
A bill before the California State Assembly could force CalPERS and CalSTRS to stop investing with private equity firms owned by sovereign wealth funds, reports efinancialnews. The bill introduced by Assembly member Alberto Torrico said the funds invested in private equity firms “owned in significant part by sovereign wealth funds that rank among the least transparent and that are funded by governing regimes repeatedly found to have violated basic human rights”.
Investments in private equity firms and funds would be banned outright if the sovereign wealth funds were affiliated with countries that had not signed certain international treaties governing human rights. China Investment Corporation owns a stake in Blackstone while Mubadala Development Corporation in Abu Dhabi owns 7.5% of Carlyle Group. Both CalPERS and CalSTRS invest in the two private equity firms. The bill is scheduled to be heard on March 16.
Northern Trust has launched the Northern Global Sustainability Index Fund, which will track the KLD Global SustainabilitySM Index to invest in companies selected for their projected investment and social returns. Northern Trust said the fund was the first to match a market capitalization weighted index of large and mid-cap developed companies in North America, Europe and Asia-Pacific. The fund is being sold at 65 basis points with no sales charge.
Pension funds do not always practice what they preach in terms of governance and need to ensure their internal operations match up to the standards they expect of the companies they invest in, according to Fiona Stewart, private pensions adminstrator at the OECD. Speaking at the World Cup of InvestmentManagement conference in Paris last week, Stewart said the OECD was revising its guidelines on pension fund governance and called for funds to contact the organizations with their own experiences in the field.
Henderson Global Investors has launched a pan-European activist fund targeted at institutional investors. The fund will invest in companies it believes to be fundamentally sound but flawed by management or operational issues. It will use the business recovery team of PricewaterhouseCoopers and a panel of over 250 independent turnaround directors to engage with management. Investment will be limited to 10 stocks listed on European stock exchanges with stakes of 5-20% in companies with market caps of between £100m and £1bn.
Vodafone were the winners of the award for best corporate responsibility report at the inaugural Corporate Register Reporting Awards in Berlin this week. Corporate Register is one of the world’s largest directory of corporate non-financial reportson environmental, social and governance issues. Responsible Investor sponsored the category for CSR reports for small and medium-sized companies, which was won by Green Mountain Coffee Roasters in the US.