The RI year ahead….and the year that was: the biggest stories of 2011…and 2012

We take a look at the most read stories of 2011 and what will make the headlines early this year.

Prediction, as the Danish physicist Niels Bohr once wrote, is difficult, especially if it’s about the future. And as we kick off a new year into a prevailing global economic gale, predictions look plain daft. So here are a few ground markers for the start of the year with a look back over the biggest headlines of 2011. On the governance front, 2012 has started inauspiciously as India’s Jan LokPal Bill on public corruption hit the political dirt, with its passage stalled in the Indian parliament. But corruption and governance reforms will mark the regulatory year ahead, notably following Japan’s Olympus scandal: Link to RI coverage
RI’s ESG Asia conference in Singapore on March 27th will pick up this and other vital institutional investor themes in Asia Link.
The 2012 US proxy season promises to be particularly interesting in election year as responsible investors focus on corporate lobbying expenditures following 2010’s Citizen United ruling that removed a cap on political donations. Under the Dodd-Frank Act, US companies will also be disclosing how they have responded to their most recent say-on-pay vote: approximately 40 companies received negative votes in 2011, although many more received significant votes against pay packages and litigation has followed some negative votes. Dodd-Frank regulation will also advance – along with shareholder scrutiny – in the areas of pay ratios, pay-for-performance, claw-backs, employee hedging of company stock and US corporate links to conflict minerals. A number of these same issues (executive pay, clawbacks, shareholder board representation, etc) look set to dominate the European shareholder season. And both in the US and Europe, the role of proxy voting advisors is to come under the legal microscope following intimations from the SEC and the European Commission of rulings early this year on disclosure of conflicts of interest and transparency of information. The EU Corporate Governance Green paper, scheduled for Q1 looks likely to require companies to produce a specific annual report on non-compliance as a solution to “comply or explain” shortcomings in corporate governance rules. Expect EU Commissioner Barnier to rule also on mandatory disclosure of company remuneration policies and individual pay of directors. In the UK, the hotly-anticipated Kay report on short-termism in equity markets will publish its interim findings in February 2012 with a final report scheduled for July. In the environmental space, all eyes are on the roll out of Australia’s Clean Energy Act, the development of green bonds and preparations for June’s Rio+20 United Nations Conference on Sustainable Development. Predictions aside, 2012 promises to be eventful!h5. During 2011, the biggest stories read on were the following:

UN Principles for Responsible Investment names new chairman Link

Shareholders drop resolution on BP’s Gulf oil spill Link

Mercer advocates massive institutional shift to climate sensitive assets Link

EU “close” to making corporate ESG disclosure mandatory – Eurosif Link

Mercer ramps up responsible investment push with senior ESG hires Link

BlackRock names new global corporate governance and RI head Link

Goldman Sachs facing six ESG resolutions at annual general meeting Link

UN Principles for Responsible Investment to look at fixed income ESG integration Link

US pension giants make massive ESG commitments Link

Raj Thamotheram leaves AXA IM advisory role Link

Thought piece: SRI research is not broken Link

PRI Chair says 90% of signatories paying fee, warns of delisting for inaction Link

Editor’s comment: Murdoch and News Corp, hacked to bits? Link

£4bn London Pension Fund Authority goes Dutch for voting and engagement on £1bn in equities Link

Investors could have added 1.6% p.a. allocating to ESG – study Link

Australian investor groups launch ESG reporting guide for companies Link

US$12 trillion ICGN to ratify ‘long-term/sustainable’ model mandate for client/manager contracts Link

Pepsi fizzes, Coca-Cola goes flat as Dow Jones names sustainability index adds and deletions Link

Generation’s Blood enters ‘Occupy Wall Street’ debate Link

EU considers requiring all financial institutions to disclose responsible investment criteria Link

Major blow as six-member SRI team at UK fund manager faces redundancy Link

Alpha for ‘high sustainability’ companies after 3 years, says major Harvard/LBS research report Link

EXCLUSIVE: Goldman Sachs Asset Management makes responsible investing commitment Link

Henderson SRI team’s talks with management end Link