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Established in 2011, the Commonwealth Superannuation Corporation (“CSC”) provides superannuation services to employees of the Australian Government and members of the Australian Defence Force. As at December 31, 2019, they had $US 36.5 billion of assets under management.
As a UN PRI signatory, CSC integrates environmental, social and governance (ESG) issues in its decision-making processes and active ownership practices. With regards to Climate Change, CSC measures and discloses the carbon footprint of its public market equities portfolio, in line with the Montreal Carbon Pledge, and conducts stress and scenario analysis. Additionally, they engage with investee companies on climate change issues with other investors as part of their involvement with the Investor Group on Climate Change (IGCC), the Carbon Disclosure Project (CDP) and the Taskforce for Climate-related Financial Disclosures (TCFD).
Climate Investment Risk Factsheet
IPE: Norway’s giant sovereign wealth fund has criticised the Principles for Responsible Investment’s (PRI) new three-year strategy for being tough for investors to achieve, with the network’s informative style also drawing the NOK10.9trn (€1trn) fund’s ire.
Financial Times: Aberdeen Standard Investments, one of Europe’s biggest asset managers, is set to launch a fund investing solely in hedge funds run by women, meeting demand from investors who are keen to foster diversity in a male-dominated industry and from those who believe greater diversity leads to better returns. [Full article available to Financial Times subscribers.]
Bloomberg: The heads of eight large Canadian pensions funds are pleading with companies to improve their environmental, social and governance disclosure by giving investors “consistent and complete” data.
IPE: The International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) are planning to merge, the organisations have announced.
Financial Times: UK listed companies are failing to live up to their diversity promises and treat reporting on their culture and strategy as a “box-ticking exercise”, according to a highly critical regulatory report. [Full article available to Financial Times subscribers.]
BNN Bloomberg: The European Commission failed to fully consider conflicts of interest when it appointed BlackRock Inc. to advise on new sustainable-finance rules for banks, according to a ruling by the European Union’s watchdog.
Yahoo! Finance: A new type of bond that penalizes issuers for failing to meet social and environmental goals is raising concern among some investors that buying the debt may not be all that ethical.
Institutional Investor: Institutional investors should examine the vulnerability of their holdings to climate change as scientific evidence points to natural catastrophes being more likely and severe as a result of increased carbon emissions, according to a study by the Financial Stability Board.
BNN Bloomberg: The Swedish bank that brought the first green bond to the world over a decade ago is now forcing corporate clients to prove they’re clean enough to stay on its books.
Established in 1990, the State Pension Fund of Finland (VER) is responsible for balancing the country’s pension expenditure. As at December 31, 2019, they had € 20.5 billion ($US 22.7 billion) of assets under management.
As part of its responsible investment approach, VER considers environmental, social and governance (ESG) factors in its investment decisions (including monitoring). Additionally, it applies norms-based and negative screening based on the UN Global Compact and companies with significant portions of revenues derived from weapons, alcohol, tobacco, gambling or adult entertainment. Moreover, as part of its commitment with the UN PRI, VER engages with external asset managers to promote the implementation of the UN's Principles for Responsible Investment.
IPE: The European Commission has launched a public consultation on the first two sets of detailed screening criteria under the EU sustainability taxonomy regulation, triggering warnings that they are at risk of deviating from scientific evidence.
Bloomberg Wealth: The world’s biggest companies seem to have decided that leadership in a global pandemic is men's work. [Full article available to Bloomberg subscribers.]
Funds Europe: The European Fund and Asset Management Association (Efama) has found that engagement with companies is a primary priority for institutional investors applying ESG criteria to their portfolios.
BNN Bloomberg: A group of financial institutions including Morgan Stanley, Bank of America Corp. and Citigroup Inc. are introducing a global accounting standard to gauge the climate impact of financial transactions.
Private Equity Wire: Limited Partners surveyed in the inaugural Brackendale Private Equity ESG LP sentiment survey 2020 rank ESG criteria an average 7.5 out of 10 in terms of importance when making an investment decision.
BNN Bloomberg: Allianz SE’s Pacific Investment Management Co. was sued by a pair of female workers who allege the money manager operates as a fraternity that favors white males.
BNN Bloomberg: BlackRock Inc. Chief Executive Officer Larry Fink said how companies approach environmental, social and governance issues has become a defining factor for investors.
Pensions & Investments: In likely his final appearance before the Senate Banking Committee, SEC Chairman Jay Clayton received warm wishes Tuesday on his future endeavors and some pointed criticisms from Democrats on issues like climate change risk disclosures. [Full article available to Pensions & Investments subscribers.]
Reuters: Investors are pushing major European companies to make sure the “missing” costs of climate change are properly reflected in their financial statements, a move that could wipe billions of dollars off the value of sectors from energy to aviation.
Established in 1962, the Ontario Municipal Employees Retirement System (“OMERS”) is responsible for the pensions of over half a million employees from local agencies across Ontario. As at December 31, 2019, they had $CAD 109 billion of assets under management.
As part of its responsible investment approach, OMERS integrates specific environmental, social and governance (ESG) considerations when assessing potential new investments and monitoring investee companies. With regards to Climate Change, OMERS works to mitigate this issue by pricing climate-related financial risks. Further, they engage with portfolio companies to improve their reporting and transparency in order to improve their understanding of climate risks. Finally, OMERS supports the Task Force on Climate-Related Financial Disclosures (TCFD) and collaborates with peers through the Investor Leadership Network (ILN).
Statement of Investment Beliefs
Bloomberg: The natural world is in crisis: Global wildlife populations have declined by an estimated two- thirds on average in the past 50 years, up to 1 million species are thought to face extinction and many of the earth’s ecosystems are badly damaged. [Full article available to Bloomberg subscribers.]
Pensions & Investments: Six France-based money managers have called on the country's largest listed companies to increase the proportion of women in senior management to one-third by 2025. [Full article available to Pensions & Investments subscribers.]
Asia Times: As the EU has already done, the ASEAN region can and must set a high bar to attract, retain and deploy ESG investment.
The Global: Sustainable investing cannot be treated as a static checklist or a corporate merit badge. The ever-evolving way of doing business and the adoption of data-driven technologies call for a shift of focus on human rights and specifically on the fundamental right to privacy.
The Guardian: Large companies and financial institutions in the UK will have to come clean about their exposure to climate risks within five years under the terms of a tougher regime announced by the chancellor, Rishi Sunak. [Full article available to The Guardian subscribers.]
Finextra: Scottish Widows is to divest at least £440 million from companies that have failed to meet its environmental, social and governance (ESG) standards, and warned this figure could grow much further if companies do not take action to improve the sustainability of their business practices.
Institutional Asset Manager: Stocks with higher ESG ratings outperformed those with weaker ESG ratings in every month from January to September, other than April, according to new research by Fidelity International.
Institutional Investor: A woman accused Kevin Ulrich — head of hedge fund firm Anchorage Capital Group and board chairman of movie studio MGM Holdings — of sexually assaulting her in New York’s Mercer Hotel, but then discontinued the suit, legal filings show.
BNN Bloomberg: The Australian government will on Tuesday defend a class-action lawsuit that claims it’s misleading investors by failing to disclose the impact of climate risk in its bonds.
Established in 2006, Future Fund is Australia’s sovereign wealth fund. It is responsible for investing for the benefit of future generations of Australians and managing six public asset funds. As at June 30, 2020, it had AUD205 billion of funds under management.
As part of its responsible investment approach, Future Fund integrates environmental, social and governance (ESG) issues when considering investment proposals, and selecting and monitoring investment managers. Additionally, the investor applies negative and norms-based screening on companies directly involved in manufacturing tobacco products, the 2008 Convention on Cluster Munitions and the 1997 Anti-Personnel Mines Convention. With regards to Climate Change, Future Fund considers carbon price, transition and physical risks in its investment processes. Further, it supports the Taskforce on Climate-related Financial Disclosures (TCFD) and engages with investee entities, either directly or in partnership with investment managers, to advocate for the adoption of TCFD recommendations.
IPE: Members of the UN-convened Net-Zero Asset Owner Alliance have published their joint position on thermal coal today, setting out the principles they say all companies in their portfolios should respect.
Reuters: The pay gap between men and women doing the same job in Europe narrowed only marginally this year, the European Commission said on Friday, even though a vast majority of EU citizens support eliminating that difference.
City Wire: The three months to the end of September saw £3bn of inflows into such strategies, according to Investment Association figures.
IPE: UK-based campaign group ShareAction has drafted responsible investment legislation that “raises the ambition of what is expected of fiduciary investors as key actors in the economy and society”.
BNN Bloomberg: The quality of corporate emissions data available from third party services is too poor to make sound investment judgements, according to a new study by asset manager Research Affiliates.
Pensions & Investments: Institutional investors in Europe have been increasing manager monitoring to ensure they are getting the best environment, social and governance results. [Full article available to Pensions & Investments subscribers.]
Yahoo Finance: Progressive groups and investors hope Democratic presidential nominee Joe Biden can win on Tuesday and quickly end Trump administration rules that stifle their ability to pick stocks using environmental, social or governance factors, setting up a renewed fight with corporate groups that backed the changes.
BNN Bloomberg: A $41 billion pension fund being sued in Australia for failing to properly account for climate change in its investments has settled the lawsuit ahead of a three-day hearing Monday.
City Wire: As governments around the world look to rebuild, infrastructure funds have an important role to play in funding the green recovery.
Finland’s largest pension provider, Keva (previously named the “Local Government Pensions Institution”) administers the pensions of the local government, the State, the Evangelical Lutheran Church and Kela, the country’s Social Insurance Institution. As at December 31, 2019, Keva had € 56.2 billion ($US 62 billion) of assets under management.
As a UN PRI signatory, Keva integrates environmental, social and governance (ESG) criteria to support its traditional investment analysis. Additionally, they apply norms-based screening on the UN Global Compact and the ILO Labour Conventions. With regards to Active Ownership, Keva engages with peers through the CDP’s Non-Disclosure Project, Climate Action 100+ and an initiative to persuade G20 countries to mitigate Climate Change.
Responsible Investment Beliefs
Responsible Investment by Asset Class
Keva’s Responsibility KPIs 2019
Wealth Professional: When faced with the choice between fighting or fleeing in ESG investing, most institutional investors are now deciding to go on the offensive, according to a new study by Schroders.
Institutional Investor: Sustainable funds are attracting record inflows this year, as allocators increasingly emphasize environmental, social, and governance criteria.
Funds Europe: Investment professionals doubt firms are doing enough to recruit from racially diverse backgrounds despite the prominence of diversity and inclusion in the industry.
Financial Times: Overhaul is vital if investors are to understand the risks companies face, says US asset manager. [Full article available to Financial Times subscribers.]
Reuters: The British government has for the first time issued a set of standards for asset managers engaged in the multi-billion pound sustainable investment sector as it looks to bolster its green credentials ahead of the next round of global climate talks.
Bloomberg: A new coalition of institutional investors and advisers overseeing more than $3 trillion in assets is pushing U.S. public companies to disclose the racial makeup of their boards in a bid to increase the diversity of corporate directors. [Full article available to Bloomberg subscribers.]
BNN Bloomberg: The Dutch fund manager Robeco Institutional Asset Management has added 232 fossil-fuel producers to its “exclusion list.” The companies range from the Philippines’s Aboitiz Equity Ventures and China’s Zhengzhou Coal Industry & Electric Power to more recognizable names like American Electric Power and Westmore Coal.
Institutional Asset Manager: The Standards Board for Alternative Investments (SBAI) has published a memo that provides a multi-jurisdictional review of current regulatory guidance on responsible investment.
Institutional Asset Manager: Almost all of the largest hubs for green finance are concentrated within Western Europe, a biannual index shows, with Amsterdam, Zurich, and London continuing to lead efforts to finance a sustainable future.
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