RI round-up: Sept 22

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

The €9.8bn Pensioenfonds Grafische Bedrijven (PGB), Dutch pension fund for the printing and publishing industry, has awarded a €60m responsible SRI mandate to Threadneedle, the UK fund manager. Dirk Wieman, chief investment officer at PGB, said the mandate was part of an ongoing €200m commitment to responsible investment, which was kicked off in March this year when the fund invested €25m in a renewable energy portfolio. Threadneedle will use Innovest Strategic Advisors to screen its portfolios on ESG issues.
KLP, the Norwegian insurer, has called on investors to support work on a new accounting standard for the extractive industries, following a high-level meeting on the issue in London last week. The proposal for a new international accounting standard would require companies to report their payments to government, their reserves, production data and costs on a country-by-country basis. Jeanett Bergan, head of responsible investments at KLP said the standard would increase transparency in a high-risk industry. She said: “It would empower individual shareholders and the securities market in general to better evaluate the risk/reward profile of individual extractive projects, and to better compare different projects within and among companies.”
Two-thirds of the UK’s largest pension funds say corporate social responsibility issues influence their selection of investment managers and consultants and 72% have their own policies governing responsible investment, according to The National Association of Pension Funds (NAPF) Engagement Survey 2008.The survey said large UK pension funds (+£1 billion in assets) are increasing their influence on the companies they invest in, 2008. It said 74% of pension funds had seen changes to board membership as a result of their engagement activities – up from 67% in 2007. There was also a rise to 69% in the number of funds recording changes to company strategy – up from 57% in 2007. On remuneration, 79% of funds saw changes in company – up from 74% in 2007. On social and environmental policy, 68% of funds reported making an impact – up from 51% in 2007. UK pension funds hold 13% of UK shares. The survey received responses from 53 pension funds with combined asset of more than £300bn.
Oxfam is launching a research project to explore the potential contribution that can be made by institutional investors to poverty alleviation and development. Over the next 12 months, Oxfam says it will work with some of the major UK institutional investors – asset managers and pension funds – to explore the potential for investors to contribute to poverty alleviation through their investment decisions and their influence as investors in companies. The project will also aim to identify the key barriers to long-term investment in developing countries, and assess how these barriers may be overcome.
The launch on November 4 will be held at Insight Investment in London at an event from 8.30 -10.30 am. Contact Helena Viñes Fiestas, Oxfam policy adviser: tel +44 1865 472118 

The OECD Working Party on Private Pensions is

seeking the views of stakeholders on the draft text of its Guidelines for Pension Fund Governance. The revised Guidelines tackle issues such as stakeholder representation in pension fund boards, the requirements of expertise and knowledge of the board, and the implementation of risk-based governance structures and mechanisms. Link to guidelines
IFC, a member of the World Bank Group, has signed an agreement with the Global Reporting Initiative (GRI) to launch a 12-month research project to help companies worldwide create new opportunities for women and adopt best practices in sustainability reporting. The project is expected to help develop a Gender Sustainability Reporting Resource Guide that will complement the GRI’s innovative Sustainability Reporting Framework.
IFC has also announced a joint project with the GRI to help companies in emerging markets improve relationships with stakeholders and attract investors by better measuring, managing, and reporting their contribution to socially and environmentally sustainable development.

ACCION International has launched The Center for Financial Inclusion to bring together private sector, non-profit and academic expertise to increase the quality of microfinance worldwide. Its Advisory Council members include: Alex Counts, president and CEO of Grameen Foundation, Christina Leijonhufvud, managing director of Social Sector Finance for JPMorgan, Marguerite Robinson of Harvard University, Robert O’Brien, head of credit for Risk Management at Credit Suisse, KateMcKee, senior advisor at the Consultative Group to Assist the Poor (CGAP) and Tony Goland, senior partner at McKinsey & Co.
F&C Asset Management, has teamed up with a group of US and Canadian investors to petition the SEC to tighten rules on how oil extracted from tar sands is declared in company reserves, arguing that they should take account of the high carbon impact of tar sands extraction. The investors, who include CalPERS and Ceres, the US investor coalition, aim to discourage the SEC from allowing energy firms to include carbon-heavy tar sands in their reserves submissions to the regulator. Elizabeth McGeveran, senior vice-president in F&C’s governance and sustainable investment team, said: “The energy consumption required to extract a barrel from Canadian tar sands is very different to a barrel of crude from the Gulf of Mexico. Understanding climate risk will assist investors in understanding and evaluating reserves.”
A group of US activists are reportedly demanding that the Seattle Employees’ Retirement System (SERS) divest from companies involved with Israeli occupied territories, according to Global Pensions magazine. The Seattle Divest from War and Occupation (SDWO) has also reportedly presented a ballot initiative (I-97) demanding SERS divest from any company that participates directly in the occupation of Iraq. However, courts have ruled that the proposed ballot initiative is invalid.
Paris-based CA Cheuvreux has become the first brokerage house to sign up to the United Nations Principles for Responsible Investment.

Investment banks advising on US mergers and acquisitions have taken advantage of inside information, a month after the SEC outlined plans by the market watchdog to better detect insider trading, according to research published by three academics, reports Financial News. The research paper called ‘Investment Banks as Insiders and the Market for Corporate Control’, was written by Andrei Simonov of Michigan State University, Andriy Bodnaruk of the University of Notre Dame and Massimo Massa of Insead in France. They identified 10,458 occasions when US companies became the target of a bid between 1983 and 2004, and then looked at the stakes in these targets taken by investment banks that were advising the bidders. They found the investment banks usually took positions in the targets after negotiations had started, but before public M&A announcements.
The European Commission has said it would look favourably at member states giving financial support for plants to test carbon-free power production, which could help fight climate change. The indication will be a significant boost to government support for companies investing in carbon capture and storage projects and other clean technologies.
*ProLogis, the industrial real estate investment trust *(REIT) manager is to lease 607,000 square feet of roof space at one of its distribution centres in California for the use of solar panels installed by Southern California Edison (SCE), the state’s largest electric utility.
The Environmental Defense Fund (EDF) has launched a website that directs potential buyers of carbon offsets to 11 projects that it says are of high quality. EDF website link*Henderson Global Investors*, Insight Investment, Jupiter Asset Management and Standard Life Investments have been awarded the gold standard the in first Ethical Investment Association (EIA) Transparency Awards, which recognises their adherence to the European SRI Transparency Guidelines.
AEGON Asset Management (UK), has acquired a subscription to ASSET4’s ESG data service. AEGON signed the UN Principles for Responsible Investment that AEGON signed in June 2008.
Bonus Pensionskasse, the €250m Austrian multi-employer pension fund is planning to increase its sustainability investments and has added further micro finance and climate change funds to the portfolio. Bonus chairman Peter Deutsch told IPE that fund’s the board had decided against investing in commodities because of the fund’s sustainability approach: “We knew that by investing, for example, in food crops we would contribute to price increases, therefore we decided against it.”
Florida’s state treasury has become the first in the US to formally analyse its investments for the financial impacts of climate change to protect its portfolio from emerging risks. The state has launched a semi-annual review, carried out by RiskMetrics, to assess how public fund managers incorporate climate risk in their bond investment holdings as part of prudent investment management. Corporate bonds represent
approximately $3.4bn of Florida’s $24bn in treasury funds.
The Irish government has drafted a new Bill on investment in munitions such as cluster bombs that will specifically change the investment policy of the National

Pension Reserve Fund (NPRF), reports ipe.com. A spokeswoman for the Irish Department for Foreign Affairs (DFA), said the aim of the legislation is for Ireland to be in a position to ratify the forthcoming convention banning cluster bombs when it opens for signature in Oslo on 3 December. Other Irish pension funds are expected to comply with the legislation.
Pictet Funds (PF), the fund distribution company of Swiss private bank Pictet & Cie, has launched the PF (LUX)-Timber fund to its range of specialist RI funds that already include biotechnology, water, clean energy and digital communications. The fund invests in listed stocks, with a focus on companies that own and/or manage forests and timberland.Christoph Butz, co-manager of the fund and Pictet’s sustainability expert, said: “Forests will become increasingly valuable in the future, especially as we come to realize how effective they are at capturing and storing carbon. With almost 20% of current global greenhouse gases caused by deforestation, planting and preserving forests is probably the most efficient way to combat climate change.”
Wheb Ventures, the green private equity firm run by Ben Goldsmith, son of the late entrepreneur Sir James Goldsmith, is aiming to raise £100m (€124m) from institutions for a clean energy fund, reports Financial News. The fund said it had already secured £57m from wealthy investors and associates by its first closing date.