.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line-white).png "CH Diligence (thicker line-white)")
Established in 2005, Établissement de retraite additionnelle de la fonction publique (“ERAFP”) is responsible for investing the French public service additional pension scheme. As at December 31, 2019, they had € 34.7 billion ($US 38.3 billion) of assets under management.
As a UN PRI signatory, ERAFP integrates environmental, social and governance (ESG) considerations in its investment process. For example, they have developed an internal rating based on their Socially Responsible Investment (SRI) Charter to favour best in class investments. With regards to Active Ownership, the investor participates in collaborative engagement initiatives on corruption, labour relations and working conditions. Finally, it is a member of the Institutional Investors Group on Climate Change (IIGCC) and the Extractive Industries Transparency Initiative (EITI).
Guidelines for ERAFP’s Shareholder Engagement
Bloomberg: There’s way more demand for bonds than there is supply, which isn’t a good thing. [Full article available to Bloomberg subscribers.]
Bloomberg: A specialized set of asset managers, responsible for investing $850 billion in higher-yield credit worldwide, is at risk of losing business unless it fixes its glaring shortage of women, especially in top jobs. [Full article available to Bloomberg subscribers.]
Wall Street Journal: Private-equity giant Blackstone Group Inc. is making a wider push to increase diversity in portfolio companies and their boards of directors with two new initiatives. [Full article available to Wall Street Journal subscribers.]
Bloomberg: Despite widespread objections from the money management industry, President Donald Trump, through the U.S. Department of Labor led by Eugene Scalia, is speeding ahead with a proposal to make it more difficult for fiduciaries of retirement plans to direct money to ESG-focused funds. [Full article available to Bloomberg subscribers.]
Funds Europe: UK pension funds are planning to increase allocations to renewables over the next five years, according to a report.
Private Equity Wire: Almost two thirds (63 per cent) of UK private equity firms now take into account Environmental, Social and Governance (ESG) principles in their investments but some firms risk falling behind as ESG rises up investors’ agendas.
Institutional Asset Manager: Research carried out by Redington has found that less than half (47 per cent) of asset managers assess gender diversity when researching potential investments – despite recognising its importance within their own firms.
Pensions & Investments: The pressure on U.S. financial regulators to address climate risk is growing as investors and regulators overseas — and others at the state level — continue to forge ahead. [Full article available to Pensions & Investments subscribers.]
Bloomberg: ESG investing is the most significant development in money management since the creation of the exchange-traded fund two decades ago and it will reshape finance just as passive funds have. [Full article available to Bloomberg subscribers]
Khazanah Nasional Berhad (“Khazanah”) is a sovereign wealth fund in Malaysia. As at December 31, 2019, Khazanah had RM 131.5 billion (USD 31.3 billion) of assets under management.
As a part of its responsible investment approach, Khazanah considers ESG risks and opportunities throughout its investment process. For example, the firm applies negative screening criteria on controversial weapons, gambling operations and the production of alcohol and tobacco. With regards to Active Ownership, Khazanah engages with management on ESG issues and exercises its shareholder rights to improve portfolio companies’ responsible business practices. Finally, Khazanah is a signatory to the UN PRI, the Malaysian Code for Institutional Investors and the Santiago Principles.
Financial Times: Which sectors of the market would flourish during a Biden presidency? That is a big question for investors right now, as Democrat Joe Biden rides high in the US polls – and his party makes bold statements about fiscal policy, unions and fossil fuels. [Full article available to Financial Times subscribers.]
CNBC: There’s growing appetite to invest in a more sustainable way, but experts warn that transparency is needed in this space if it’s to really do any good for the planet.
Financial Times: Legal and General Investment Management is set to warn 500 companies to do more to tackle climate change or risk being publicly named and shamed, in an escalation of a long- running environmental campaign by the UK’s largest asset manager. [Full article available to Financial Times subscribers.]
Funds Europe: ESG appears to be passing the scrutiny test with more investors perceiving performance merits. This is with the exception of investors in the US, where scepticism has grown, according to a survey.
Bloomberg: There are many societal parallels between climate change and Covid-19, and also a potential business opportunity. [Full article available to Bloomberg subscribers.]
Pensions & Investments: Institutional investors using environmental, social and governance factors as a risk tool, as well as a source of investment, find the main objection is a lack of consistent data, according to panelists at the Milken Institute Global Conference, which was held virtually. [Full article available to Pensions & Investments subscribers.]
Bloomberg: A group of 16 institutional investors controlling A$850 billion ($609 billion) in assets is seeking to speed up Australia’s emissions reductions. [Full article available to Bloomberg subscribers.]
Bloomberg: Europe is set to become the world leader in green bond issuance and one of the side effects could be a stronger currency. [Full article available to Bloomberg subscribers.]
Funds Europe: High carbon emitting companies have been called on by investment management firms to commit to a net zero future by setting science-based targets.
Established in 2008, Alberta Investment Management Corporation (“AIMCo”) is responsible for investing the pension, endowment and government funds of Alberta. As at December 31, 2019, they had $CAD 118.8 billion of assets under management.
As a UN PRI signatory, AIMCo integrates environmental, social and governance (ESG) issues into its investment decision-making processes and across the investment cycle. For example, AIMCo applies negative and norms-based screening criteria on controversial weapons, tobacco companies, the UN Global Compact and the OECD Guidelines for Multinational Enterprises. With regards to Climate Change, AimCo aligns with Canada’s commitment to reduce greenhouse gases by 30% by 2030. Additionally, they advocate for uniform and comparable climate-change disclosures through the Investor Leadership Network (ILN).
Institutional Asset Manager: The asset management industry has reached a critical period for nurturing gender diversity, industry experts have advised, as investment firms choose how they will adapt to new challenges caused by the coronavirus pandemic.
Funds Europe: Ethnic diversity in business has come into the spotlight again, as investment managers call on FTSE 100 companies to reveal the ethnic make-up of their boards.
Funds Europe: Asset managers see governance as their central ESG factor - but environment and social issues are gaining importance, research shows.
News Wire: A new survey of leading institutional investors released today by The Risk Management Association (RMA) revealed that 95% of respondents believe that securities lending activities can coexist with Environmental, Social, and Governance (ESG) principles.
Bloomberg: The European Union looks set to launch a foray into social bonds, a market that has already swelled four-fold this year to fund projects to help societies recover from the coronavirus. [Full article available to Bloomberg subscribers.]
Financial Times: The EU has agreed to delay implementing a key requirement of new rules designed to make it easier to judge how ‘green’ asset managers are, bowing to pressure from Europe’s €17tn investment industry. [Full article available to Financial Times subscribers.]
Bloomberg: The investing world of environmental, social and governance just broke through another barrier, and the growth is starting to raise questions (and even concern) about how much bigger it can get. [Full article available to Bloomberg subscribers.]
Expert Investor Europe: Substantial investor demand for environmental, social and governance (ESG) products could see asset management companies transform themselves into responsible investment firms.
City A.M.: One of Britain’s largest institutional investors, Legal & General, has warned FTSE 100 companies with all-white boards that it will vote against them if they do not hire a Black, Asian or minority ethnic (BAME) director by 2022.
Established in 1816, Caisse des Dépôts et des Consignations (“Caisse des Dépôts”) is a French public pension fund. As at December 31, 2019, the financial institution had 177 billions euros of assets under management.
As part of its responsible investment practices, Caisse des Dépôts integrates ESG considerations in their internally managed portfolios. Additionally, Caisse des Dépôts excludes controversial weapons, tobacco, thermal coal and regions with money laundering or terrorism financing from its investment universe. With regards to Climate Change, the financial institution adopted a group-wide strategy resting on 7 pillars to decarbonize its portfolios by 2050. As part of this commitment, the Caisse des Dépôts became a member of the Net-Zero Asset Owner Alliance.
Charter for Responsible Investment
Responsible Investment Report 2019 (Available in French only)
Financial Times: Traditional socially responsible exchange traded funds that rely on simply excluding “sin stocks” and other securities linked to sectors such as coal mining or tobacco look set to become a thing of the past, data shows. [Full article available to Financial Times subscribers.]
International Investment: Outdated ideas about gender roles are still are still holding women back in the fund management industry, according to GAM Investments.
Bloomberg: Investment firms managing more than A$1 trillion ($712 billion) are calling on Australia’s biggest companies to appoint more women to executive roles, as they step up pressure for gender diversity.
Institutional Investor: While the pandemic hasn’t damped investor demand for ESG, asset flows to U.S. active managers fell in the first half of 2020, according to Broadridge.
Financial Post: Egypt pulled in orders for nearly five times the $750 million size of the Middle East and North Africa’s first sovereign green bond, as it pushes ahead with anti-pollution and renewable energy projects.
Pensions & Investments: California pension funds and policymakers have a road map for integrating climate change risk and other ESG considerations into their investment decisions, thanks to a partnership between the U.N.-supported Principles for Responsible Investment and UC Berkeley Law's Center for Law, Energy & the Environment. [Full article available to Pensions & Investments subscribers.]
Reuters: When the death of George Floyd forced companies to reflect on why there were so few Black people in their senior ranks, top banks and private equity firms pledged to do better. But one corner of the finance world - the hedge fund industry - made fewer public statements.
Bloomberg: More than thirty of the largest U.S. companies have agreed to new disclosures of previously private race, gender and ethnicity workforce data as part of a push by the New York City comptroller and three city retirement funds.
Pensions & Investments: Corporate boards are improving the ways they deal with crisis management and ESG issues but less so on diversity, according to PwC's Annual Corporate Directors Survey released Monday. [Full article available to Pensions & Investments subscribers.]
