The Financial Reporting Council is calling for listed companies, directors and investors to give their views on the progress made in implementing the Combined Code on Corporate Governance. The FRC is analysing whether the code has helped to improve board performance, what the impact of the code is on smaller companies and whether the ‘comply or explain’ mechanism is effective. The regulator emphasises that the study does not mean the code will change and Sir Christopher Hogg, chairman of the FRC, stated that amendments will only be proposed if there is “clear justification” and that this will bring about a “separate consultation”. All views are needed by July 20.
Canadian SRI assets have increased significantly from CN$65.46bn in 2004 to CN$503.61bn in 2006 according to a report by the Canadian Social Investment Organization.
The largest area of growth was with regard to pension funds adopting SRI strategies – the pension fund SRI assets grew from CN$25bn in 2004 to CN$443bn in 2006. The SIO concluded that the widespread adoption of integrated SRI strategies is “only few years away”. The Canadian Socially Responsible Investment Review is produced once every two years and the first study was published in 2000. It is based on a survey of community investment providers and financial managers and the data for the 2006 review was gathered between September 2006 and January 2007.
The first in-depth report on how leading public pension funds are using responsible investment practices was published on April 24. Responsible Investment in Focus: How leading public pension funds are meeting the challenge aims to inspire pension funds from across the world to adopt these practices and to develop their own strategies.
The report surveyed 15 public pension funds – with assets ranging from $33m to $460bn – across five continents and was jointly produced by the UNEP Finance Initiative and the UK Social Investment Forum. It is a look at the current situation with regard to SRI and pension funds rather than a study of best practice or a benchmarking report.
The pension funds surveyed include the Environment Agency Pension Fund (UK), CalPERS (USA) and PREVI (Brazil).
Contact Paul Clements-Hunt UNEP Finance Initiative 0041 79 349 54 86 www.unep.ch; UK Social Investment Forum 020 7749 9950 www.uksif.org
Look before you leap
One third of US companies do not conduct a background or integrity assessment before carrying out an overseas acquisition or investment according to a report from Deloitte Financial Advisory Services.
Look before you leap 2007: Investigative Due Diligence in International Business Relationships also found that half of US companies also don’t do so before entering into a joint venture and that, if investigations are carried out, companies don’t probe deep enough into many areas that could cause financial and reputational damage such as links to organised crime or terrorism. The report concludes that companies that operate internationally should make investigative due diligence part of the standard operating procedure. The investigations should also examine the full range of problems that could affect foreign investments and business relationships abroad.
Insight Investment, the UK investment management company, has published the first report that is fully compliant with the UN Principles for Responsible Investment.
Putting Principles into Practice is the company’s first annual report and outlines how the business delivered on its commitment to be a responsible investor in 2006, the ways in which it complies with the PRI as well as how Insight Investment aims to deliver returns for its clients while integrating corporate governance and corporate responsibility issues into its investment activities. The publication of the report – in April – coincided with the one-year anniversary of the launch of the PRI of which Insight Investment was one of the first signatories. The PRI are voluntary principles that set out a framework of investor action with emphasis on the importance of environmental, social and governance issues.
Banco Galicia, the Argentine bank, as well as SEB, the Nordic bank, have adopted the Equator Principles. The principles are a system of guidelines for assessing social and environmental risk and have been developed by the International Finance Corporation.
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