Wednesday, September 28, 2011

Sustainalytics partners with Korean firm

SRI research firm Sustainalytics is moving into the Korean market, today announcing a strategic partnership with Sustinvest, an investment research and consulting company.

Together, the two firms will provide responsible investors in Korea with a global environmental, social and governance analysis that is informed by knowledge of local markets, Sustainlytics said in a news release.

"Korea is a vibrant market for responsible investment," said Michael Jantzi, Sustainalytics CEO. "We welcome the opportunity to align ourselves with the market leader. Our clients will benefit by having enhanced coverage and analysis of Korean securities through the Sustainalytics' platform and direct access to ESG analysts in the region."

"We are very pleased to enhance our working relationship with Sustainalytics. The ESG market in Korea is growing and we are glad to be able to provide enhanced global coverage to responsible investors here," added Sustinvest CEO Youngjae Ryu.

In addition to enhanced research capabilities, Sustainalytics and Sustinvest will be exploring new products and services for the Korean market, including an ESG ranking of Korean companies that will be published in 2012.

Sustinvest is the first SRI research and consulting firm established in Korea.

Tuesday, September 27, 2011

Fund firms file class action against Sino-Forest

Northwest & Ethical Investments and Comité syndical national de retraite Bâtirente inc. have launched a class action suit against Sino-Forest Corporation.

The suit, which seeks $5.8 billion in damages, was filed on behalf of investors who purchased Sino-Forest shares or notes from 2004 to 2011.

“NEI Investments has a fiduciary duty to protect the interests of our investors and in commencing this action we believe we are acting strongly to uphold the integrity of the investment industry,” said Bob Walker, vice-president, Ethical Funds, NEI Investments in a statement. “In our longstanding history of engaging with companies to promote responsible corporate governance practices, this is the first time NEI Investments has taken this last-resort approach to protect investors.”

“When our members suffer losses in their retirement plan and those losses result from the type of misconduct alleged in the statement of claim, it is our duty to assist in seeking remedies from those who bear responsibility,” added Batirente’s Daniel Simard.

Sino-Forest’s shares have been frozen amidst allegations that the Chinese forestry company exaggerated its revenues and timber holdings in China.

Monday, September 26, 2011

SRI Monitor Weekly News Update

Bill Gates backs financial transaction tax to aid more

Siemens to quit nuclear more

Oil-sands workers press MPs to oppose ‘wrongheaded’ Keystone more

Ikea: Stock Market Pressures Hinder more

Elements of Islamic more

compiled with the assistance of Nick Searle

Thursday, September 15, 2011

Fracking Under Pressure

This new report by Dayna Linley, global energy sector lead for Sustainalytics, clearly outlines what’s going on in the world of fracking today, and what responsible investors should be aware of. Fracking is the colloquial term for hydraulic fracturing, that is, pumping fluids (usually water and chemicals) into a geologic formation at high pressure to release the natural gas (shale gas).

The report begins with some background on global energy demand, which is constantly increasing and driving the shift to unconventional oil and gas. ‘Due to restricted access to known reserves, many public companies are shifting their operations into higher risk areas and into unconventional oil and gas deposits. High-risk regions are generally characterized by social volatility or environmental sensitivity, while unconventional deposits are those that either contain heavier or more contaminated oil or gas, or that occur in less accessible reservoirs or rocks.’ This is followed by an explanation of the potential impacts of shale gas extraction on air emissions, land and water.

What should the socially responsible investor do? Investors should be aware of the risks, primarily reputational risk, regulatory risk and litigation risk, and should engage with companies to encourage the adoption and ongoing development of best practices. ‘Oil and gas companies, working with their energy service providers, should evaluate local conditions and regulatory frameworks to determine locally appropriate best practices to limit impacts to the environment, local populations and the bottom line.’

The section on best practices details some best practices: transparency, baseline water testing, use of green products, process changes regarding fluid management and minimization, GHG and air emission reduction and well integrity testing, contractor management and community engagement. Included are examples of corporate initiatives in each of these areas.

A final caveat - ‘…responsible investors should view shale gas development in the context of the broader need to shift our economy away from dependence on fossil fuels. Shale gas development, even with best practices in place, does nothing to contribute to this shift. Therefore, while pushing for best practices, responsible investors should push even harder for investment in renewable, sustainable forms of energy and for regulatory environments that incentivize such investment.’

See the sidebar for more stories on fracking.
Read the full Sustainalytics report here.

Wednesday, September 14, 2011

Teachers becomes UNPRI signatory

The Ontario Teachers Pension Plan has signed on to the United Nations Principles for Responsible Investment. Teachers joins a number of other major Canadian pension plans which are UNPRI signatories, including the Canada Pension Plan Investment Board, the Caisse de dépôt et placement du Québec, the British Columbia Municipal Pension Plan and OPSEU Pension Trust.

More than 200 new signatories have joined the UNPRI in the last 12 months, raising the total number of signatories to 900, managing assets worth nearly US$30 trillion.

A recent survey of UNPRI signatories found that 94% of asset owners and 93% of investment managers have a responsible investment policy, pointing to what the UNPRI calls a “growing commitment to responsible investment.”

Teachers has more than $107 billion in assets and is the largest single-profession pension plan in Canada, administering the pensions of nearly 300,000 active and retired Ontario teachers.

Dr. James Gifford, Executive Director, UN-backed Principles for Responsible Investment, in conversation with Teachers CEO Jim Leech.

Tuesday, September 13, 2011

What's in a name?

The SIO Board is considering options related to branding of the SIO, and of the term Socially Responsible Investment. The term SRI has been debated and discussed extensively in Canada and abroad for many years. Some members and potential members of the SIO have raised concerns about the term SRI, and have argued that SIO should move to rebrand the concept. At the same time, the name of the Social Investment Organization itself, with its brand rooted in the concept of social investment may no longer be the best label that reflects the work they do and the member companies they serve.

Over the past few years, the SIO's American sister organization has moved from being the Social Investment Forum to Forum for Sustainable and Responsible Investment. Similarly Eurosif is the European Sustainable Investment Forum and UKSIF is now promoting 'sustainable and responsible finance'.

The term 'social' is now more often used in areas like social finance, social enterprise and other types of impact investing that are not necessarily focused on publicly traded companies. But the social issues addressed by SRI have not disappeared. They are reflected in the increased use of ESG (environmental, social, governance)as a way of quantifying SRI.

The SIO is sending out a survey today to members asking them for their thoughts on the name and branding of the SIO. But I believe this is a discussion that the broader SRI community can, and should, also engage in.

What do you think of the term 'social'? Are it's connotations positive or negative? How should we sort out all these various terms? Is there something to be said for consistency?

Solutions? Ideas? Let us know what you think.

Monday, September 12, 2011

SRI Monitor Weekly News Update

TSX proposes shareholders vote for each director (and leapfrogs over OSC) more

Civil Disobedience goes more

Oil industry backs more rules for fracking (really!) more

Google discloses carbon footprint for the first more

How Howard Buffett will use his grandfather's recipe for riches to disrupt more

GDP is dead. Will the world be happier without it? more

compiled with the assistance of Nick Searle

Thursday, September 8, 2011

Results of the DJSI Review 2011

Changes are being made to the Dow Jones Sustainability Indexes (DJSI) as a result of the 2011 annual SAM Corporate Sustainability Assessment.

SAM performs an integrated assessment of economic, environmental and social criteria with a strong focus on long-term shareholder value. A key criteria change for 2011 is water related risks; this new criteria was introduced for the first time in the 2010 assessment. Based on SAM's analysis of water consumption, 13 sectors have been identified as potentially exposed to water-related risks. The questions in the criteria seek to assess whether companies are able to measure their exposure to water-related risks and whether they have appropriate risk management systems in place to mitigate risks around quantity/quality of water, regulatory changes or stakeholder conflicts. Based on data collected on water-related risks during last year’s assessment, they have further developed the water risk methodology, mainly through the reinforcement of a balanced consideration of the company’s exposure to risks and its management of those risks. Other key changes include social and environmental reporting and Media and Stakeholder Analysis (MSA) methodology.

In the DJSI World, the top 3 additions, by free float market capitalization as of July 15th 2011, are Medtronic, Schneider Electric and Societe Generale. Kinross was also added, coming in at number 9. The top 3 deletions were Coke, HP and Encana.

The DJSI North America saw more Canadian companies dropped. The top 3 deletions are Microsoft, Coke and Goldcorp, with Enbridge and National Bank also in the top 10. The top 3 additions are Goldman Sachs, EMC and CMX.

Pepsi is definitely making strides in the Sustainability Face Off, having been named the supersector leader in Food and Beverage.

All changes will become effective with the opening of the stock markets on September 19th, 2011.

Wednesday, September 7, 2011

Standard Life adds Meritas to seg fund line-up

Standard Life announced today that it has added Meritas SRI Funds to its line-up of retail segregated funds.

Ideal Meritas Balanced Portfolio, Ideal Meritas Growth & Income Portfolio and Ideal Meritas Income & Growth Portfolio will become part of Standard Life’s Signature Series of segregated funds, along with offerings from Dynamic Funds.

“The new Meritas SRI Funds in Standard Life's offering provide Canadians who would like to invest in a socially responsible manner with the option of some downside protection,” Standard Life said in a release. “Research indicates that interest in ethical investing by retail investors is on the rise and that investors want to know more about the social and environmental performance of companies in their investment portfolios.”

Tuesday, September 6, 2011

SRI Monitor Weekly News Update

Magna, Ontario to invest $400-million in R&D for electric more

Driving the electric Volt in the real more

The Human Cost of more

Ernst&Young: 2011 Proxy Season more

Raising the bar for sustainability rating agencies
What the GRI is more
and some new work from more

compiled with the assistance of Nick Searle