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AMF Pensionsförsäkring is a life insurance company owned by the Swedish Trade Union Confederation and the Confederation of Swedish Enterprise. It manages the occupational pension for over 4 million individuals. As of March 31st 2019, AMF had USD 67 billion of assets under management.
AMF seeks to fully integrate sustainability issues into their asset management activities, including effectively managing carbon-related risks to ensure alignment with the Paris Agreement, voting their proxies, and engaging with portfolio companies. To be included into AMF's portfolios, companies must comply with the UN Global Compact, the OECD Guidelines and cannot be involved in the manufacture and distribution of controversial weapons or coal exploration. Today, the firm is working towards the implementation of an ESG framework for its properties and alternative investments.
IPE: English evangelical protestants allied with the Quakers initiated the campaign to abolish the UK slave trade in the early nineteenth century. Two centuries later, the Vatican has said that climate change is a “moral and religious imperative for humanity”. Will the fate of fossil fuel companies be defined by public, sovereign and religious investors? And can other investors watch from the sidelines?
Wall Street Journal: Impact investors are meeting their community and environmental goals without giving up financial returns on their deals, an advocacy group’s latest survey shows.
European Commission: The European Commission has today published new guidelines on corporate climate-related information reporting, as part of its Sustainable Finance Action Plan. These guidelines will provide companies with practical recommendations on how to better report the impact that their activities are having on the climate as well as the impact of climate change on their business.
Citywire Selector: Almost twice as many hedge fund firms demonstrated good ESG practices in comparison to last year, LGT Group's annual ESG report found.
IPE: The proportion of women on the supervisory boards of Swedish companies is still too low, according to the head of the SEK335bn (€31.4bn) Swedish national pension fund AP2.
IR Magazine: A group of 88 investors – including HSBC Global Asset Management, Amundi and Investec Asset Management, and with combined assets totalling more than $10 bn – is pushing for companies to do more when it comes to environmental reporting.
Bloomberg: A group of financiers with $100 billion of loans to shipowners are about to get stricter on the kinds of vessels they’ll finance as part of a drive to improve the maritime industry’s environmental performance.
IPE: Hessen, which includes the city of Frankfurt, has become the first of Germany’s 16 federal states to sign the UN’s Principles on Responsible Investment (PRI).
Top 1000 Funds: Engagement and stewardship are topics of increasing important to asset owners, either directly for the assets they manage or indirectly through their external asset managers. Historically, the focus has been public equities although interest is rapidly growing in fixed income as well.
The National Employment Savings Trust (NEST) was set up to facilitate automatic enrolment for workers in the UK as part of the government's workplace pension reform in 2008. As of March 31st 2018, NEST managed £ 2.7 billion in behalf of 6.4 million members, making it the largest defined contribution master trust in the UK.
The consideration of ESG risk factors in the investment management process is part of NEST's core beliefs, as it can improve risk adjusted returns, support long-term wealth creation and help managing reputational risks. The responsible investment strategy focuses on addressing climate change, improving banking conduct and culture, understanding workforce and human capital, and promoting audit best practices. To achieve these goals, ESG issues are integrated in risk management and active ownership. Further, NEST engages with regulators and standard setters such as the TCFD, the Workforce Disclosure Initiative, and the Parliamentary Environmental Audit Committee among others. Going forward, NEST is seeking to divest its tobacco holdings from all of its portfolios in the next two years.
IPE: This month, the European Commission is due to release guidelines on climate-related reporting by companies. These are to supplement existing guidelines on non- financial reporting that the Commission published in 2017 in connection with the EU’s Non-Financial Reporting Directive (NFRD).
Yahoo! News: The federal government's Expert Panel on Sustainable Finance says Canada has a long way to go to achieve sustainable growth — and its final report says financial markets will play a fundamental role in unlocking that economic potential.
Devex: For nearly two decades, the International Finance Corporation has been a global leader in establishing Environmental and Social Performance Standards, and good corporate governance practices for our clients. We are experienced experts in all these fields.
Morningstar: The group's new policy has three prongs: corporate governance overseeing its climate strategy, encouraging clients to transition into green energy and realigning loans, investments and assets to further the goals of the Paris agreement of keeping global warming at or below 2 degrees Celsius by the end of the century, Credit Agricole said.
Corporate Advisor: This diversity drive is backed by a new report, which details the experiences of black professionals working in the investment management industry as well as black student considering their careers.
IPE: Swiss pension funds and other institutional investors are calling upon members of Switzerland’s lower house of parliament to back legislation making it mandatory for Swiss companies to carry out human rights due diligence.
IPE: The EU’s sustainability “taxonomy” could help investors reduce analysis costs and reputation risks, according to a member of the technical expert group developing the classification system.
Institutional Investor: Asset owners expect environmental factors will become more pertinent to their investments than traditional financial criteria over the next five years, with more than 80 percent indicating it would be a “material risk” not to integrate ESG factors, UBS Asset Management said.
Pensions & Investments: Infrastructure — not unlike other asset classes — faces increased scrutiny from asset owners aiming to limit adverse impacts on the environment, including through investments that specifically target the United Nations' Sustainable Development Goals.
Founded in 1987, HESTA is the Australian industry superannuation fund for health care professionals. The fund has over 850,000 members and had AU$ 46 billion of assets under management as of June 30th, 2018.
Investing responsibly and recognizing that supporting a healthy economy, environment and society is in their members' best interest is one of the fund's core investment beliefs. HESTA's responsible investment framework is guided by the UN PRI requirements and the UN Global Compact principles on Human Rights, Labor, Environment, and Corruption. As a universal investor, the Super Fund regards Climate Change as source of risk and opportunities for the fund's portfolio. To deliver the best risk-adjusted returns, HESTA has developed a Climate Change policy favoring Engagement with portfolio companies and policy makers over divestment and exclusion (except for Thermal Coal and related assets). Going forward, HESTA is seeking to increase its impact by aligning its assets to the UN SDGs. Naturally, as the Superannuation fund for health and community service workers, the fund has chosen to align its portfolio with SDG 3: Good Health and Wellbeing, SDG 5: Gender Equality, and five others.
IPE: In the calm of ATP’s red-brick headquarters in leafy Hillerød, four quant managers have spent more than a year integrating environmental criteria into the pension fund’s DKK35bn (€4.8bn) to DKK40bn foreign equities portfolio.
Financial Stability Board: The Financial Stability Board (FSB) welcomed the publication today of the 2019 Status Report by the industry-led Task Force on Climate-related Financial Disclosures (TCFD). The Status Report provides an overview of the extent to which companies in their 2018 reports included information aligned with the core TCFD recommendations published in June 2017.
Top 1000 Funds: While the onus is primarily on company supply chains, banks, asset managers and financial services also have big roles to play, according to James Cockayne, director at the Centre for Policy Research at United Nations University.
IPE: The implications of climate change have certainly caught the attention of shareholders, with many now sending a clear message to corporate management that they are expected to act on it.
Institutional Asset Manager: IFC, an anchor investor, and HSBC intend to commit up to USD100 million and up to USD75 million respectively to the fund. IFC is a member of the World Bank Group and a leader in catalysing private sector participation in sustainable financing. Since 2010, IFC has issued 143 green bonds in 16 currencies, totalling USD9 billion.
Pensions & Investments: AP2, Gothenburg, Sweden, divested from equities and bonds in 60 producers of tobacco and nuclear weapons, a spokeswoman said.
Expert Investor: In the whitepaper ‘The Evolving Approaches to Regulating ESG Investing’, Morningstar said in the US, where climate change is a “contested concept”, ESG investment factors must be justified by explaining “why,” while in Europe they must explain “why not”.
Reuters: London Stock Exchange Group Plc said on Monday it acquired data provider Beyond Ratings, as the exchange operator bulks up its Information Services business to meet a growing demand for environmental, social and governance (ESG) products.
Established in 1949, the Nathan Cummings Foundation is a faith-based institution rooted in the Jewish tradition of social justice with an endowment of US$ 500 million. The organization focuses on finding solutions to the climate crisis and growing inequality by providing grants to organizations in the US, Israel and others, as well as investing its endowment assets.
The Nathan Cummings Foundation has been a longstanding advocate of Responsible Investing. Not only is the organization a founding signatory to the UN PRI, it also provides grants to initiatives seeking to further Responsible Investing and Corporate Social Responsibility such as Ceres, the Interfaith Center on Corporate Responsibility, and As You Sow. The Nathan Cummings Foundation believes that leveraging capital markets to invest and use their influence as shareholders will help further their mission. Consequently, in March 2018, the Foundation committed to align the entirety of their endowment to Mission-Related Investments, a type of Impact Investing.
Changing Corporate Behaviour through Corporate Activism
Public Equity Portfolio Footprint – March 2019
IPE: The UK’s financial services regulator should investigate the absence of a genuine market in asset manager shareholder voting policies, according to an influential group of pension scheme trustees.
IPE: Exxon shareholders staged a significant rebellion yesterday at the company’s annual general meeting registering 40.8% support for a proposal to separate the positions of chair and CEO.
CNBC: A 2018 report found that 35% of REIT properties have geographic exposure to climate hazards, including inland flooding, typhoons or hurricanes, and coastal flooding and elevated sea levels. The research evaluated 73,500 properties owned by 321 REITs.
Common Dreams: BlackRock CEO Larry Fink faced criticism from community leaders, researchers, and legal experts at the company’s annual general meeting (AGM). During the meeting speakers from the Amazon and the U.S. called out Fink for the fact that his rhetoric on climate change does not match BlackRock’s actions, while others from India, the Philippines, and the U.S. were denied entry into the meeting.
The Chronicle Herald: Hong Kong sold a five-year U.S. dollar-denominated green bond with a coupon of 2.5%, attracting over $4 billion in orders from investors globally, the Hong Kong Monetary Authority said.
Funds Europe: The term ‘ESG’ can be confusing for investors. There are a number of ways to define what constitutes ESG investing and there are different ways to integrate it. This means investors today have an increasing number of products with varying approaches to choose from.
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