Top Stories

March 04, 2020

Sustainable Investment

Pension fund giants team up in attack on ‘short-termism’
Japan’s $1.6 trillion state pension fund, Government Pension Investment Fund (GPIF), has joined forces with the California State Teachers’ Retirement System (Calstrs) and UK-based USS Investment Management to launch an attack on “short-termism” by companies and asset managers. These pension funds have previously tended to leave public commentary on market structure and sustainability issues to asset managers. Japan’s GPIF has said that a focus on short-term returns laid their portfolios open to “potentially catastrophic systemic risks”. In a joint letter by the GPIF, Calstrs and USS they signalled a fundamental shift in investment policy and a focus away from “sustainability related” risk. In a clear signal that immediate co-operation was expected, the letter added that asset managers that focus only on short-term, explicitly financial measures were not attractive partners. The letter echoed previous warnings from financial intelligence agency, Moody’s Analytics, that cited that climate change alone had the potential to destroy about $69 trillion in global economic wealth over the next 80 years. (Financial Times*)

Sustainable Fashion/Supply Chain

H&M opens up global supply chain to rivals in green push

Fashion giant H&M is opening up its global supply chain to other clothing brands as it tries to push more sustainable ways of making garments. The Swedish group is launching a service, called ‘Treadler’, to allow smaller brands to use it and its suppliers in everything from product development and sourcing to production and logistics. The plans are beginning with a pilot scheme involving several midsized and large brands. Additionally, the group could help other brands design a supplier network to help them avoid the effects of a trade war or try to minimise the impact from coronavirus. H&M is known for its cheap clothes and fast fashion, leading to accusations that it fuels overconsumption as well as criticism of its approach to workers’ rights. But the Swedish retailer has long worked on its sustainability strategy and is aiming to become carbon-neutral by 2030, using more renewable energy and more recycled materials in its production. (Financial Times*)


Women work for free for two months a year, says the TUC analysis

Women work an average of 63 unpaid days as a result of the gender pay gap, which stands at 17.3 percent for all employees, according to the national Trade Union Centre (TUC) analysis.  The findings, which derive from the Office for National Statistics’ annual survey for hours and earnings, show the widest gender pay gap is in finance and insurance. According to figures submitted by thousands of businesses and public bodies in 2019 there was negligible progress on closing the pay gap between 2017 and 2018, with the average gap among those obliged to take part narrowing 0.1 percentage point to 9 percent. The TUC has argued that the government should force companies to carry out equal pay audits, produce action plans to close the pay gap in their workplace, and fine companies that fail to comply with the law instantly. (The Guardian)

Climate Change/Campaigns

Jupiter AM adds to fossil fuel transition pressure on Barclays

Jupiter Asset Management has become the latest investor to put pressure on multinational bank Barclays to phase out the provision of financial services to the fossil fuel sector and utilities that are not aligned with the Paris climate goals. According to the environmental organisation Rainforest Action Network, Barclays has provided more than $85 billion of financing to fossil fuel companies and high carbon projects since the Paris Agreement was signed in 2015. Jupiter, which has a 1.2 percent share in Barclays, is the latest to commit to supporting a shareholder resolution at the bank’s 7 May AGM in efforts to force change. The news comes in the same week as environmental activist agency Greenpeace staged a series of protests at Barclay’s branches across the UK, while the bank is also amongst a group of firms to face calls from billionaire hedge fund manager Sir Christopher Hohn for it to strengthen its coal financing policy. (Business Green)

Climate Change/Strategy

Ikea slashes global emissions as business growth continues

Ikea has recorded a year-on-year decrease in its total carbon footprint, despite expanding its operations, for the first time in its history. The world’s largest furniture retailer revealed the progress in its latest sustainability report, highlighting that its global carbon footprint across all scopes decreased 4.3 percent in absolute terms during the 2019 fiscal year. During the same period, sales grew by 6.5 percent as the firm continued to expand its operations. Last year, Ikea’s global carbon footprint across all scopes rose by 2.8 percent, with the firm admitting at the time that it was not able to decouple emissions and growth. The company is aiming to use 100 percent renewable energy across its global operations by 2030, with an interim aim for 100 percent renewable electricity by 2025. On carbon mitigation and sequestration, the report highlights Ikea’s recent £171 million investment package in clean energy and nature restoration schemes. (edie)

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Image source: spilled coins from the jar by Michael Longmire on Unsplash.