SRI News in Europe and elsewhere
December 2006
UN climate summit closes on global-warming deal
A fund and a five-year programme to help developing countries deal with the effects of global warming were the main outcomes of the Nairobi conference on climate change. A timetable to review the Kyoto Protocol was also agreed.
The 180-nation conference concluded on 17 November with the adoption of the "Nairobi Work programme on Impacts, Vulnerability and Adaptation" which will be supported by a fund to support concrete adaptation activities in developing countries.
http://unfccc.int/meetings/cop_12/items/3754.php
UK sees first bill to require CSR reporting
The UK, for the first time, has passed a bill requiring mandatory reporting on business' social and environmental performance. The Companies Act 2006 requires Directors to report on what they are doing and therefore, having to consider how it affects the community and environment. It makes it mandatory for business to report anything concerning the welfare of the employees, community, environment, suppliers and the company itself. It will also allow shareholders and the general public to judge companies' performances.
The law will not make companies report on anything that is considered commercially sensitive or confidential and most requirements of the bill do not come into force until 2008. However, companies are being advised to start preparation as soon as possible.
UNEP FI Launches a Working Group on Responsible Property Investment
Leading investors worldwide must embed environmental thinking in the heart of their property investment portfolios if the financial services sector is to play a pivotal role in halting climate change, the United Nations Environment Programme Finance Initiative (UNEP FI) Working Group warns.
The new UNEP FI Property Working Group, launched formally in early December at the headquarters of Caisse des Dépôts, in Paris, was born out of the PRI research process and is constituted by institutional investors and fund managers striving to encourage sustainability in mainstream property finance. The Working Group’s first project is to capture and present best practice which demonstrates the financial and environmental value of responsible property investment.
http://www.unepfi.org/work_streams/property/working_group/index.html
Novethic, Amadeis and BNP Paribas AM present the findings of the fifth annual Socially Responsible Investment (SRI) survey and outlook for the French institutional market.
29% of the institutions surveyed have invested more than 50 million euros in assets based on SRI selection criteria. 71% of the investors responding to the survey that have already invested in SRI assets say they intend to make additional investments in funds of this type in the three years to come, as do 54% of those that have not yet made the plunge. The year 2006 is turning out to be a pivotal one, with some large institutional investors getting involved in SRI for the first time (FRR, ERAFP, AGIRC-ARCCO, etc.), and SRI investments should reach a record level in 2007. In fact, 23% of the investors surveyed expect SRI to account for more than 10% of their total assets within three years, as opposed to only 4% for whom this is currently the case.
OECD provides guidance for assessment of corporate governance rules and practices
The OECD has taken an important step to reinforce the role of its Principles of Corporate Governance as a global standard by issuing guidance for users in assessing their implementation. The Principles, agreed by governments in 1999 and revised in 2004, are designed to maintain public trust in companies and stock markets.
The newly published Methodology for Assessing Implementation of the OECD Principles of Corporate Governance can be used by policy makers for self-assessments and by other interested organisations and researchers, such as director institutes, investor associations, analysts and academics.
AP1, DnB NOR and GES win Marriott’s ear on child sex tourism
Swedish national pension fund Första AP-fonden and Norwegian financial services group DnB NOR played a leading role when Nordic and US investors recently succeeded in making hotel chain Marriott International address problems with child sex tourism that arose at the company’s premises in Costa Rica in the late 90s.
Out to Maximize Social Gains, Not Profit
Q&A with Muhammad Yunus, a former professor of economics and winner of the Nobel Peace Prize, by reporters and editors of The New York Times.
Read the New York Times article
FRR to investigate fiduciary duty in responsible investing
French pensions reserve fund FRR is co-sponsoring a project to determine the financial basis of socially responsible investment. Euronext and some 15 asset management houses are involved with the research, which will be initiated early next year. The group intends to clarify the exact terms of research by early next year, but these will probably include both research from a macro-economic and a micro-economic perspective, as well as corporate social responsibility, extra financial investing and thematic issues such as climate change. The research will be made available to other investors if they wish.
How to fill the knowledge gap on climate change
EPN (European Pensions and Investments News) has carried out a survey of European pension funds’ attitudes to climate change, in co-operation with the Institutional Investors Group on Climate Change (IIGCC). The results reveal awareness of the topic, but also a lack of in-house expertise, and a shortage of consultant advice and fund manager experience.
http://www.epn-magazine.com/news/categoryfront.php/id/263/SRI_11.06.html
Tomorrow’s Value – The Global Reporters 2006 Survey of Corporate Sustainability Reporting
This report, carried out by SustainAbility, in partnership with UNEP and Standard and Poor's, ranks the leading corporate reporters from around the world. This year's study finds the leading reporters taking a more sophisticated approach to identifying and reporting on material issues and better linking to core business processes within companies. The report especially looks at whether (and how well) the link between sustainability and wider market opportunities is understood by companies.
http://www.sustainability.com/insight/research-article.asp?id=865
Study Forecasts Explosive Growth in the Voluntary Carbon Offsets Market
ICF International launched a detailed report entitled Voluntary Carbon Offsets Market: Outlook 2007. Although the voluntary carbon offsets market has steadily grown in recent years—as measured by the number of transactions and market value—it is still quite small compared to the market for project offsets that companies can use for compliance purposes under the Kyoto Protocol. The market is experiencing significant growth as companies not subject to caps on carbon emissions decide voluntarily to offset some or all of their emissions from a variety of sources directly or indirectly related to their business activities. A variety of obstacles (credibility, fragmentation) could, however, impede the market's future growth.
http://www.icfi.com/Newsroom/carbon-offsets-2006.asp
Materiality report
The Materiality Report, prepared by LRQA in association with BT and AccountAbility, provides a toolkit for managers to work out which issues are 'material' to their underlying performance, and encourages business to focus on these issues in their public reporting. Material issues are those which impact on an organisation's performance, and may be environmental, social or legislative as well as financial.
http://www.businessassurance.com/display/BAC/Materiality+Report
Business must adapt to realities of Earth’s ecosystems, warns new publication
Ecosystem Challenges and Business Implications warns that companies must transform business models and operations if they are to avoid major economic losses caused by the current degradation of ecosystems and the vital services they provide.
The publication, produced by Earthwatch Institute (Europe), the World Conservation Union (IUCN), the World Business Council for Sustainable Development (WBCSD), and the World Resources Institute (WRI), is based on global scientific facts and projections from the UN's multi-year Millennium Ecosystem Assessment and interviews with a range of business leaders to assess the implications and strategies needed to respond to environmental challenges.
http://www.wbcsd.org/Plugins/DocSearch/details.asp?DocTypeId=251&ObjectId=MjE3NDA
Pioneering Study Shows Richest 2% Own Half World Wealth
The richest 2% of adults in the world own more than half of global household wealth according to a study released by the World Institute for Development Economics Research of the United Nations University (UNU-WIDER).
The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.
