Principled investment Henderson Global Investors, F&C Asset management, Insight Investment, BT Pension scheme and ABN Amro Investment are among over 20 institutional investors, with funds worth more than $2 trillion, who joined UN secretary general Kofi Annan to launch a set of Principles for Responsible Investment on April 27.
The principles were developed during a nearly year-long process convened by the secretary general and co-ordinated by the UN Environment Programme Finance Initiative and the UN Global Compact. The six overarching principles, which are voluntary, are underpinned by a set of 35 possible actions that institutional investors can take to integrate environmental, social and corporate governance considerations into their investment activities. Annan said: “the Principles provide a framework for achieving better long term investment returns and more sustainable markets.” Contact Gavin Power, UN Global Compact 00 1 212 963 4681 www.unpri.org
Green growth
There is a positive correlation between the management of climate change risks and the creation of shareholder value in the oil and gas industry, research from Sustainability Asset Management suggests. SAM assigned companies with a climate score based on four criteria and found that the higher their climate score, the better the return on equity they generated over the past five years.
The findings form part of The Sustainability Yearbook 2006, which combines data from SAM’s Sustainability Research, an annual sustainability assessment of over 1200 companies in 58 sectors, with PricewaterhouseCooper’s Approach to Governance, Risk and Compliance. SAM identified companies that are a) better than their peers at seizing opportunities and managing risks derived from economic, environmental and societal developments and b) are attractive investment opportunities. Top performers included Statoil in the oil and gas sector, Unilever in food production, and BMW in automobiles. Contact Dominique Reber, SAM 00 1 41 1397 1012 www.sam-group.com
Shareholder concerns
Pay, performance and public trust are high on the agenda in PIRC‘s latest round of Shareholder Voting Guidelines, released on February 21. The independent research and advisory council for institutional investors on corporate governance and social responsibility bases its guidelines on the principles of the Combined Code of Corporate Governance. Key themes addressed in the guidelines include: corporate values: UK plc still faces a major challenge in restoring public trust. narrative reporting: PIRC supports the goal of improved narrative reporting to assist investors in understanding the performance of the business and believes that the Accounting Standard Board’s reporting statement remains the current benchmark standard. board performance: over time investors need to develop tools to assess objectively the quality of a non-executive’ s contribution to the board. pay: performance linkage and transparency have not yet been satisfactorily addressed transparency: developing a business culture of transparency and accountability is one of PIRC’s goals. Pay remains opaque despite pages of remuneration reports. Political lobbying is “shrouded in secrecy”. Contact Alan MacDougall, PIRC 020 7247 2323 www.pirc.co.uk
Co-op vetoes IFC bonds
The Co-operative Bank has committed not to buy any bonds issued by the World Bank’s private sector arm, the International Finance Corporation, following a two-year review of the sustainability of World Bank’s investment products. The Co-operative Bank has expressed growing concern about the IFC’s commitment to fossil fuel extraction and its “failure to provide meaningful investment” for renewable energy projects. Contact Duncan Bowker, Co-operative Bank 0161 837 4938www.co-operativebank.co.uk
Responsible development
The International Finance Corporation’s Capturing Value programme invites research houses, rating firms, index providers and similar organisations to compete for grants of up to $500,000. The grants will support development of new information services geared to sustainable and responsible investment in developing country firms. By making better information available, the goal is to facilitate an increase in high quality long-term investment in emerging markets from pension funds and other investors worldwide. Contact Lucie Giraud, IFC 00 1 202 458 4662 www.ifc.org
Out with the in-crowd
In the FTSE4Good semi annual review of constituents, the results of which were announced in March, 19 companies were deleted and 40 added. Eighteen of the deletions were for environmental criteria, 16 of which were US companies including Hilton. Canada-based nickel producer Inco was removed for failing to meet the index’s human rights criteria. Contact Sabrina Bhangoo, FTSE4Good 020 7866 1821 www.ftse.com
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