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RI round up: May 6

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

Michel Barnier, the European Union’s internal markets Commissioner, has promised a Green Paper on pay at financial firms. “We will consult widely and then we will act,” he told a meeting of the European Parliament’s Economic and Monetary Affairs Committee. He acknowledged the initiatives on pay by MEPs Arlene McCarthy and Said El Khadraoui.
Barnier’s speech (in French) is available here
Citigroup has become the first major US bank to join the United Nations Global Compact. CEO Vikram Pandit said: “We are committed to making the Global Compact and its principles part of the strategy and culture of our company, and to engage in projects which advance the broader development goals of the United Nations.” Citi put more than $5bn into sustainable investments, according to its latest citizenship report.
South Korean companies have embraced sustainability but human rights and board independence are still key challenges, according to a new report from the Emerging Markets Disclosure Project. The 33-page study, Unlocking Investment Potential: ESG Disclosure in Korean Companies, looked at the Corporate Social Responsibility reporting practices of 10 major South Korean firms. The report is available here*Australian UN PRI signatory Vision Super* is to merge with its fellow Victorian super fund Equipsuper as of July 1 2013. The combined entity would have more than $8bn in assets and a membership of more than 150,000. The funds’ boards said they “identified the opportunity to create a larger fund capable of delivering benefits of scale”.
Trillium Asset Management, the US socially responsible investment specialist, aims to reach $2bn in assets under management by 2013, according to an interview with chief executive Matthew Patsky with Reuters. Patsky was named CEO in October following the death of company founder Joan Bavaria in 2008
The new Hermes Private Equity Environmental Innovation Fund, the fund-of-funds vehicle run on behalf of the UK’s Innovation Investment Fund, has made its first investment. Hermes is among the backers of cleantech investor WHEB Ventures Private Equity Fund 2 LP d which has raised just over £100m.
A new solar energy asset management firm has been launched in London. SolarField Investment Management will exploit the “long-term yields” in government incentivised solar set ups in Europe. It is looking to raise €100m. The founding partners are Joachim Gerhard and Christopher Wilkins.

The Australian Council of Superannuation Investors has welcomed the government’s intention to support more effective and transparent decision making on executive pay following the Productivity Commission’s Executive Remuneration Report. “The Federal Government’s decision to adopt the majority of the Productivity Commission’s recommendations, coupled with the claw back provisions on bonuses, represent a balanced and practical way forward on these governance reforms,” said ASCI chief executive Ann Byrne. Link
The SEC is to be briefed on ESG later this month. The US Securities and Exchange Commission’s Investor Advisory Committee’s meeting on May 17 is to include a briefing on the Investor as Owner Subcommittee’s environmental, social, and governance disclosure work plan.
The new Global Impact Investing Ratings System has announced $6.5m in funding from the Rockefeller Foundation, the United States Agency for International Development, Prudential Financial and Deloitte. The organisations have partnered with project leader B Lab. GIIRS was launched in January.
The World Bank’s International Finance Corp. says better corporate governance can raise company performance in the Middle East and North Africa. Corporate Governance Success Stories, one of the first reports of its kind in the region, looks at measures taken by 11 companies in the region to improve board effectiveness and management control.Dutch banking giant Rabobank says it plans to raise up to €1.5bn from institutional investors for a senior debt fund focusing on wind and solar energy projects. The new fund will let investors co-invest alongside the bank in project finance targeted at onshore and offshore wind as well as ground-mounted and photovoltaic solar. Rabo saw “good initial interest from European pension funds”.
Mainstreaming responsible investment is the topic for the third annual PRI Academic Conference in Copenhagen. As well as presentations from leading ESG academics and advisors, senior figures in the institutional investment world such as Fonds de Réserve pour les Retraites Executive Director Antoine de Salins and PensionDanark CEO Torben Möger Pedersen are also set to speak. The agenda is here

Kempen & Co analyst Joost Beemer has written a book on investing in renewable energy and cleantech, using portfolio theory to study the return characteristics of both asset classes. “Investing in Renewable Energy and Cleantech: a Finance Perspective: an Academic View on the Returns of Renewable energy and Cleantech in Portfolio Management” is published by VDM Verlag. Link here

A leadership battle at the UK Shareholders’ Association has been resolved. The private shareholders’ group said a bid to remove chairman Martin White and two other directors has been defeated. It will now focus on “increasing the influence of private investors generally”.

Consulting firm Towers Watson has set up a separate executive compensation company, Pay Governance LLC, amid new SEC proxy rules governing consulting fees. The move aims to allay clients’ fears about potential conflicts of interest at the firm, formed at the start of this year from Towers Perrin and Watson Wyatt. The new company will launch formally on July 1.

The United Arab Emirates’ new corporate governance code has come into force, stipulating that chairmen of listed firms are not allowed to have managerial roles. Another requirement is that a third of listed firms’ administrative boards should be independent. The new code has been brought in by the Emirates Securities and Commodities Authority (Esca). Shareholders will also be able to veto board bonuses.

Embattled US mining firm Massey Energy Co. has hit back at investor criticism in the wake of the Upper Big Branch disaster. Lead independent director AdmiralInman wrote to the CtW Investment Group, which is calling for board changes, saying withholding votes for directors would “undoubtedly substantially disrupt the Board’s continuing effort to be responsive to shareholder concerns”.

Index provider STOXX has launched a European Christian Index. The new index charts companies from the STOXX Europe 600 Index according to the values and principles of the Christian religion. It will get input from an independent committee of “experts of the Christian community, as well as members of the academic and investment community”. Link

The Church Commissioners, the body which manages the assets of the Church of England, reported a 15.6% return on its investments in 2009 – outperforming its comparator group, the WM All Funds Universe. Total assets have grown to £4.8bn from £4.4bn at the end of 2008. Link