"We believe this minority universe will continue to shrink as it has in the past few years as more large-cap companies embrace sustainability reporting,” said G&A Institute Chairman Hank Boerner in a press release. “The benefits of sustainability reporting are becoming increasingly obvious over time and the long-term benefits of adopting sustainability strategies and reporting on performance become easier to measure and quantify."
News and views on the world of socially responsible investing in Canada, including original content related to social, environmental, human rights and corporate governance issues. Written and maintained by a Toronto-based financial advisor and an Ottawa-based writer/editor.
Tuesday, December 18, 2012
Study finds dramatic rise in sustainability reporting
"We believe this minority universe will continue to shrink as it has in the past few years as more large-cap companies embrace sustainability reporting,” said G&A Institute Chairman Hank Boerner in a press release. “The benefits of sustainability reporting are becoming increasingly obvious over time and the long-term benefits of adopting sustainability strategies and reporting on performance become easier to measure and quantify."
Friday, December 7, 2012
Mercer investigates loyalty program for long-term shareholders
Earlier this year, the Generation Foundation published a white paper which included loyalty shares as one of five key actions to accelerate the mainstreaming of sustainability by 2020.
such as incentivizing longer term, engaged ownership," said Peter Knight, Partner at Generation Investment Management and Trustee of the Generation Foundation. "By commissioning Mercer to undertake this consultation, the Generation Foundation wants to see if this idea has merit among key stakeholders.”
Friday, November 23, 2012
Ellmen resigns from Social Investment Organization
Monday, November 12, 2012
Globe story provokes backlash in SRI community
Wednesday, October 17, 2012
BMO tops 2012 Carbon Disclosure Project rankings
Only one company scored high enough to make the 2012 Canada 200 Carbon Performance Leadership Index (CPLI) – Bank of Montreal. Performance is grouped into 6 bands A, A-, B, C, D and E. The CPLI includes only Performance band A, which this year was achieved only by Bank of Montreal.
The CDLI (Carbon Disclosure Leadership Index) is made up of the 20 companies with the highest carbon disclosure scores from the Canada 200 sample, and these are, in order:
Bank of Montreal 91
ARC Resources Ltd. 90
Stantec Inc. 89
Teck Resources Limited 88
TMX Group Inc. 84
Suncor Energy Inc. 84
Barrick Gold Corporation 84
Enbridge Inc. 84
TransCanada Corporation 83
Enerplus Corporation 83
Telus Corporation 82
Bank of Nova Scotia 82
Tim Hortons Inc. 80
Emera Inc. 79
Cenovus Energy Inc. 79
Toronto-Dominion Bank 78
Inmet Mining Corporation 78
Nexen Inc. 78
SNC-Lavalin Group Inc. 77
Canadian National Railway Company 77
The 2012 Investor CDP Information Request was sent to the Canada 200 companies on behalf of 655 institutional investors (CDP signatories) representing $78 trillion in assets. 107 of the Canada 200 companies responded, a meagre 54%; however, they represent 79% of the Canada 200 by market capitalization.
Apart from the scoring, 3 key findings of the report, ‘Improving transparency as the foundation for carbon performance’ were:
• Companies are identifying more climate change risks with a direct short-term impact on their business
• Companies prioritize climate change on the corporate agenda, finding more value in emissions reduction initiatives and more opportunity to improve profitability
• Companies improve transparency on climate change issues, but lag on performance criteria
There is plenty of detail in the report, as well as graphics which clearly illustrate the range of responses. Accenture, the official writer of the report and CDP’s global implementation partner, has done an excellent job assembling the results and making the information accessible.
There remains a significant gap between the CDLI average and the Canada 200 average. So, while the leaders are improving, it’s not clear that the laggards are catching up. Furthermore, the range of scores for the 2012 CDLI is 77 - 91, while the range of scores for the Global 500 CDLI companies is 94 -100. Canada has a lot of catching up to do!
Tuesday, October 16, 2012
2012 CDP Canada 200 Report launched today
A capacity crowd of dark suits enjoyed coffee and snacks provided by Tim Hortons, as Scott Bonikowsky, Vice President, Corporate, Public and Government affairs, Tim Hortons Inc., was the keynote speaker.
The Toronto event began with an introduction by Stephen Donofrio of the CPD, who provided a brief overview of the work of the CPD, that is, to use the power of measurement and information disclosure to improve the management of environmental risk. Having worked on climate change through carbon disclosure for over a decade, the CDP is now addressing water use and beginning next year will be integrating the work of the Forest Footprint Disclosure Project, creating a comprehensive system for reporting on natural capital.
Mr. Bonikowsky then gave us some perspectives on Tim Horton’s sustainability journey, frankly admitting at the start, “We have made considerable strides and progress but we have considerable challenges ahead of us.” Tim’s created a sustainability strategy in 2009, from a starting point of adding value to the business, while recognizing that the company had to mitigate its significant negative environmental impacts. Some of this was driven by the recognition of the ‘relentless push towards increased transparency’ and the surprising number of requests for information on what Tim’s was doing with respect to sustainability and environmental initiatives. When the company released its first GRI report in 2010, it was downloaded 82,000 times, both a testament to the desire for information, and a spur to continue providing it.
He described some of Tim’s' challenges, including trying to reduce the absolute/aggregate impacts of a fast growing company, dealing with franchise owners as partners who have to be relied upon to execute many of the measures, and, in a comment echoed by many, the lack of standardization in sustainability reporting, leading to questionnaire fatigue and the ironic result that companies find themselves spending more time reporting and less time engaging in actual activities that reduce their footprint.
Brief remarks from Ernst Ligteringen, CEO, Global Reporting Initiative, commended the participation of the TMX at the launch, both in Toronto and Montreal. He stated that we need policy initiatives to encourage companies to make sustainability reporting part of the normal flow of information they release. The Shanghai Stock Exchange has been particularly active on this front, resulting in an increase in sustainability reporting initiatives among Chinese companies.
This was followed by highlights of the report (I’ll blog about this fully in the next post), and a brief Q and A and wrap up.
Monday, October 15, 2012
Three Cheers for Expensive Oil
October 15, 2012
Three Cheers for Expensive Oil
By DAVID R. MONTGOMERY
A version of this article appeared October 15, 2012, on page R4 in the U.S. edition of The Wall Street Journal, with the headline: Three Cheers for Expensive Oil.
Scarce oil may be one of the best things that could happen to agriculture.
To understand how that could be, consider two facts. First, agriculture uses a huge amount of energy—almost a fifth of the total consumption in the U.S. alone. And second, farming as we know it erodes fertile land far faster than nature can replace it.
Now, thanks to steep rises in oil prices, growers are adopting practices that use less fuel. As a tremendous side benefit, these methods not only fight erosion but they build soil and enrich it with nutrients crops need. In fact, I'd argue that for perhaps the first time in modern history, the short-term incentives for individual farmers are aligning with humanity's long-term interest in conserving the soil and its fertility. It's a potentially huge change that could reshape farming as we know it.
Here's a look at two of the most rapidly growing and effective practices already in use and another that may take off soon.
Ditching the Plow
The most popular fuel-reducing strategy involves a radically new way of planting seeds. Instead of breaking up the ground with a plow to plant seeds, no-till farming leaves the remains of last year's crop on the surface. Drills punch through this mat of vegetation and insert seeds into the ground.
Ditching the plow can cut fuel consumption by as much as half, bringing substantial savings. It also reduces the need for expensive fertilizer. Specialized machinery can inject fertilizer along with the seeds, putting just enough right where developing crops need it most.
Those savings help explain why farmers have been moving to no-till, and why even more will as the cost of oil rises. But the side benefit of this shift will be alleviating a problem that's been plaguing humanity for thousands of years.
Plowing removes plant cover, and bare fields erode 10 to 100 times faster than shielded soil, far faster than nature can make more. Overplowing has stripped whole regions bare and helped bring down past civilizations. Parts of Syria that were extensively farmed in Roman times are now bare, rocky slopes, for instance, and in southern Greece you can still find ancient agricultural tools scattered on hillsides that can no longer support cultivation.
Modern industrial societies aren't immune. Islands of unplowed prairie in pioneer cemeteries across the American heartland stand higher than the surrounding, eroded fields. On some corn fields in the Midwest, I've seen soil that was so degraded it looked like beach sand.
No-till farming can change all that. The practice can reduce erosion by more than 90%, and bring soil loss close to the pace of soil production. Over time, no-till can also increase soil organic matter and boost microbial activity that helps cycle nutrients from the soil into crops and back again. And not plowing helps reduce runoff, leaving more water in the ground where it's available to crops.
Feeding the Earth
The next strategy involves reducing reliance on fertilizers that don't enrich the soil and require a lot of oil to manufacture. Instead, low-cost organic matter like manure, crop stubble, garden trimmings and even household food scraps are used.
This certainly isn't a new idea. Centuries ago, the Dutch reclaimed land from the sea and enriched it with organic wastes. Long before then, farmers from China to Peru improved their soils by returning organic matter to their fields.
But in the U.S. and Europe, organic sources of fertilizer fell out of favor in the middle of the past century. There are a lot of reasons, some of which don't have anything to do with agricultural effectiveness. Big crop subsidies led many farmers to stop keeping livestock, which meant no more on-farm manure. And after World War II, former munitions factories started cranking out cheap fertilizer, which together with cheap oil made animal husbandry an expensive, labor-intensive anachronism.
Intensive chemical-fertilizer use also dramatically increased crop production, especially on already-degraded land, during the Green Revolution that has helped feed the world's rising population. But the cost of fertilizer is tied to the price of oil.
With the price of manufactured fertilizers rising, recycling organic matter is becoming more cost-effective. It also can build fertile soil. While chemical fertilizers won't disappear from agriculture anytime soon, rising prices will make it increasingly attractive to rebuild soil fertility using organic matter, particularly on the third of the world's cropland already degraded beyond use.
Spurred by high fertilizer prices, some farmers are bringing livestock back onto their land. One energetic couple in Missouri told me how they used chicken and goat manure along with intensive composting to turn an abandoned farm with degraded soil back into a productive and profitable working farm in under five years.
It's not just conventional farmers who are adopting these methods. Some cities are setting up community food gardens to help counter rising food prices. These urban farmers see recycling organic waste as the key to growing fresh, affordable produce in cities, where most of humanity now lives.
I saw this for myself when I visited one such garden built atop a reclaimed landfill near downtown Seattle. Looking at the oversize vegetables and digging my hands into rich fertile soil, I could hardly believe this farm was started less than a decade before with trucked-in, sterilized dirt. Regular additions of compost rapidly turned this small patch of land into a reliable source of fresh fruit and vegetables for residents and local food banks.
Putting Down Roots
The final alternative strategy isn't here yet. But when it arrives, it has the potential to change the way American farmers harvest the country's third-largest crop: wheat.
The Land Institute in Salina, Kan., is developing a range of perennial grains that would make annual plowing unnecessary. To my mind, the most revolutionary efforts involve a version of wheat that can be used in many of the same foods as the regular stuff.
Harvesting perennial wheat would mean fewer passes with the tractor and less oil burned. Meanwhile, the longer roots of perennial wheat reach deeper into the soil, tapping into more of the water it holds, increasing crop tolerance to drought. Longer roots also enhance nutrient uptake, further reducing the need for fertilizer.
There's a dramatic illustration of the idea hanging in a stairwell at the Land Institute: a life-size picture, close to two stories tall, of a perennial wheat plant and its Rapunzel-like roots. Next to it, a picture of a conventional wheat plant looks anemic by comparison, its roots reaching down just several steps.
Perennial wheat also has the potential to do long-term good. Harvesting the wheat would leave the plant and its root system in place, storing a lot of organic matter below ground, where it helps support the growth of the next crop. Minimally disturbed ground, reinforced by interlaced root systems, also means far less soil erosion.
To some, I'm sure that all this speculation about a revolution in farming sounds naively optimistic. But the movement toward these new methods is already under way, and the economic case for more farmers to adopt them will only get stronger as oil and fertilizer get pricier.
Let's hope so, for our descendants will need productive, fertile soil just as much as, if not more than, we do today. And what we now consider alternative methods of farming are some of the best ways to ensure that they'll have plenty of it.
Dr. Montgomery, a professor of geomorphology at the University of Washington in Seattle, is the author of "Dirt: The Erosion of Civilizations." He can be reached at reports@wsj.com.
Saturday, October 13, 2012
Responsible investors expanding into emerging markets
Thursday, October 4, 2012
European SRI assets flourishing, study says, though mainly institutional
Thursday, September 20, 2012
Enbridge Removed from Jantzi Social Index
Wednesday, September 12, 2012
Extreme weather events drive climate change awareness: Carbon Disclosure Project
Increasing incidents of extreme weather events which disrupted business operations and supply chains around the world have pushed climate change up the boardroom agenda, according to the Carbon Disclosure Project’s Global 500 Climate Change report released today.
“With the hottest U.S. summer on record, fires in Russia and flooding in the U.K., Japan and Thailand, among other events, 81% of reporting companies now identify physical risk from climate change, with 37% perceiving these risks as a real and present danger, up from 10% in 2010,” CDP said in a press release..
“Extreme weather events are causing significant financial damage to markets,” says Paul Simpson, CEO of the Carbon Disclosure Project. “Investors therefore expect corporations to think more about climate resilience. There are still leaders and laggards but the economic driver for action is growing, as is the number of investors requesting emissions data. Governments seeking to build strong economies should take note.”
The report notes that 2012 has seen a ten percentage point increase year-on-year in companies integrating climate change into their business strategies (2012: 78%, 2011: 68%), contributing to a 13.8% reduction in reported corporate greenhouse gas emissions, the report found.
Malcolm Preston, global lead, sustainability and climate change, PwC says: “Even with progress year-on-year, the reality is the level of corporate and national ambition on emissions reduction is nowhere near what is required. The new ‘normal’ for businesses is a period of high uncertainty, subdued growth and volatile commodity prices. If the regulatory certainty that tips significant long term investment decisions doesn’t come soon, businesses’ ability to plan and act, particularly around energy, supply chain and risk could be anything but ‘normal’.”
The CDP report, co-written by professional services firm PwC on behalf of 655 institutional investors representing $78 trillion in assets, provides an annual update on greenhouse gas emissions data and climate change strategies at the world’s largest public corporations.
The report features emissions data from 379 companies and rates them according to their climate change transparency. The best disclosers enter CDP’s Carbon Disclosure Leadership Index. This year, two companies achieved the maximum carbon disclosures scores of 100: German pharmaceuticals company Bayer and the consumer goods giant Nestle of Switzerland. While U.S. companies dominate the leadership index, German companies are proportionally over-represented, as are companies from Finland, Spain and the Netherlands.
Royal Bank of Canada was listed as one of the world’s largest non-responders to CDP’s request for emissions data, along with other big names such as Apple Inc., Berkshire Hathaway, Caterpillar Inc. and Amazon.com.
Thursday, September 6, 2012
SIBs: the newest arrow in the SRI quiver
Social Finance in the UK, an SIB pioneer, defines ‘Social Impact Bond’ as “a financial vehicle that brings in non-government investment to pay for services which, if successful, deliver both social value and public sector cost savings. Investors receive a financial return from a proportion of the cost savings delivered.”
In an SIPC webinar today, Christian Novak of Frontier Market Advisors Inc. provided an introduction to Social Impact Bonds. He began by outlining some benefits of SIBs - risk is transferred from the government to private investors, they ensure that outcomes are the primary focus of the program and can maximize use of government funds.
He then provided two examples of SIBs, Peterborough Prison in the UK, and Rikers Island jail in New York City. The Peterborough SIB was launched in 2010 and has a goal of reducing recidivism rates by 7.5% or more compared to a control group of short sentence prisoners in the UK. It is a multi-stakeholder initiative with 17 investors and at least 3 social service organizations involved.
In Rikers Island, the sole investor is Goldman Sachs (!!?!), and once again the goal is to reduce recidivism, but here by 10% or more. In a twist, although Goldman Sachs is putting up 9.6 million dollars, it only stands to lose 25% of it (2.4 million) if outcomes are not reached, as Mayor Michael Bloomberg’s personal foundation is providing a guarantee for the balance. If SIBs are a ‘merger of profit and social progress’ as described by Mr. Novak, we can see whose interest is profit and whose is social progress…
Some of the risks of SIBs enumerated by Mr. Novak are performance risks, structural risk, government risk and reputational risk, particularly as SIBS are very visible transactions and the ‘financialization’ of the social sector remains controversial. Challenges facing SIBs are creating easily and accurately measurable metrics, linking metrics to measurable savings, the development and selection of intermediaries, establishing appropriate legal and regulatory frameworks, broadening investor participation and perhaps eventually creating a liquid secondary market for SIBs.
Read Deloitte’s report Paying for outcomes Solving complex societal issues through Social Impact Bonds
Check out social finance for more about what’s happening in Canada.
Thursday, August 23, 2012
SEC eviscerates conflict minerals reporting requirements
A version of this article appeared August 23, 2012, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Wal-Mart, Target Avoid Mining Rule.
WASHINGTON—Big retailers including Target Corp. and Wal-Mart Stores Inc. may largely escape a costly new rule that requires U.S.-listed companies to disclose whether their goods contain so-called conflict minerals that are blamed for fueling violence in central Africa. Retailers lobbied to be exempted from the requirement, which will affect manufacturers of a range of products, including smartphones, light bulbs and footwear.
The Securities and Exchange Commission had proposed an earlier version of the rule that would have applied to retailers carrying products sold under their own brand names, but which are typically produced by outside contractors. On Wednesday, however, the SEC voted 3-2 to adopt a final rule that would exempt companies that don't exert direct control over the manufacture of such products.
The rule, which was mandated by the Dodd-Frank financial overhaul, has been a source of friction between the SEC and companies ever since the law was passed in 2010. Companies have said the requirement would be burdensome and expensive.
Indeed, the SEC on Wednesday sharply raised its estimate of the rule's financial impact, saying it would cost companies a total of $3 billion to $4 billion upfront, plus more than $200 million a year. The SEC initially had said the cost of compliance would be just $71 million. It said it revised its estimate based on comments from the business community and others.The SEC estimates around 6,000 U.S. and foreign companies would have to comply with the conflict-minerals rule, which covers products containing tin, tantalum, tungsten and gold.
Unverified Origins
Some store-brand goods that may include 'conflict minerals'—tin, tantalum, tungsten or gold mined in or around the Democratic Republic of Congo:
Wal-Mart Stores:
Canned goods (tin in cans)
Light bulbs
Clothing and footwear
Target:
Canned goods
Jewelry
Best Buy:
MP3 players
Flat-screen TVs
Companies that merely attached their brand or label to a generic product made by another company aren't covered, the SEC said. But it added that if their involvement with the product went beyond that point, they "would need to consider all of the facts and circumstances" to determine if they were governed by the rule. The SEC also on Wednesday passed a similar disclosure rule focused on the development of foreign oil fields, which was also mandated by the Dodd-Frank law.
Industry lobbyists were optimistic the bulk of store-brand goods sold by leading retailers wouldn't fall under the conflict-minerals requirement, but they were waiting to read the full text of the rule."We are pleasantly surprised where [the agency] ended up," said Jonathan Gold, National Retail Federation vice president. Mr. Gold declined to elaborate before seeing the full text, which the SEC posted on its website Wednesday evening.
SEC Chairman Mary Schapiro said Wednesday the conflict-minerals rule was implemented in a "fair and balanced manner," and the SEC "incorporated many changes from the proposal that are designed to address concerns about the costs."
A spokeswoman for Target said the retailer is "committed to sourcing products from business partners who engage in responsible mining practices" and is "taking time to understand the impact of the new rule." Best Buy Co., which also sells store-brand products, declined to comment.
The four minerals covered by the rule are thought to be used to finance armed groups in the Democratic Republic of Congo and the surrounding region. Companies using any of these minerals are required to investigate whether they were mined from the area. Those that believe they use minerals from the region must file a report with the SEC saying what steps they took to verify the minerals weren't taxed or controlled by rebel groups.
"We remain concerned about the challenge of complying with these new and complex requirements," said Retail Industry Leaders Association Vice President Stephanie Lester.The companies don't have to file a so-called minerals report with the SEC if their materials come from scrap or recycled sources. Companies that fail to verify their sources of supply still can sell their products, but run some reputational risk if their connections to problems in the region are publicized.
Nonprofit groups wanted companies to take immediate steps to comply with the rule, rather than take advantage of a two-year transition period during which they could categorize certain products as "DRC conflict undeterminable."Corinna Gilfillan, head of the U.S. office of Global Witness, a human-rights group, said she was disappointed the SEC approved a two-year phase-in period for the rule, accusing the agency of caving to pressure from businesses.
SEC records indicate that representatives of Best Buy, J.C. Penney Co., JCP Costco Wholesale Corp., Lowe's Cos., Wal-Mart and Target met with officials to air their concerns about the rule. Costco declined to comment. J.C. Penney and Lowe's Cos. didn't respond to requests for comment.
Republican SEC commissioners Troy Paredes and Dan Gallagher opposed the rule, questioning whether it belonged in the securities laws and whether the agency had determined the rule would do more harm than good.
The SEC rejected other demands from business groups, including an exemption for companies using minimal amounts of minerals. The SEC said companies' minerals reports would be subject to the same level of legal liability as annual reports and other important SEC filings. Also on Wednesday, the SEC voted 2-1 to adopt rules requiring companies to report their payments to the U.S. and foreign governments for developing oil and gas fields, another regulation that businesses say could cost them billions of dollars. The SEC rejected a plea from the industry for an exemption for companies operating in places that forbid the disclosure of such payments.The American Petroleum Institute, in a press release, said the rule would hand U.S. oil companies' competitors a tactical advantage.
—Shelly Banjo contributed to this article.
Write to Jessica Holzer at jessica.holzer@dowjones.com
Wednesday, August 22, 2012
Vancity Divests Enbridge Holdings from IA Clarington Inhance SRI Funds
Vancity announced today that pipeline company Enbridge no longer meets Vancity Investment Management’s environmental, social and governance criteria for its socially responsible investments. The decision was based on the U.S. National Transportation Safety Board report on the Enbridge 2010 pipeline spill in Michigan.
As a result, Vancity Investment Management (VCIM) has divested its Enbridge holdings in the IA Clarington Inhance SRI funds which it manages.
VCIM is a sub-advisor on three SRI funds for IA Clarington and determines which holdings are contained within the funds, based on ESG criteria. Two of these funds previously contained Enbridge holdings.
“When you purchase the IA Clarington Inhance SRI funds, you are also investing in a disciplined process that considers ESG factors and financial analysis,” says Tamara Vrooman, President and CEO of Vancity. “Vancity Investment Management’s portfolio managers balance risk, return and the impact of all the investments that are made. They believe in engaging with companies to improve their ESG performance, however, if companies no longer meet the ESG criteria, they will divest the holdings from the portfolio.”
“It looks like there’s even more risk [to Enbridge], which we think further potentially puts the financial performance at risk,” Vrooman told the Globe & Mail. “We think the balance has tipped such that it’s not going to be a higher-performing investment in our criteria.”
The Globe also notes that Vancity is not the only investment firm considering divesting Enbridge. Northwest & Ethical Investments LP (NEI) has spent six years pressuring the company to gain better first nations acceptance before pursuing the Northern Gateway pipeline. NEI sponsored a resolution at this year’s annual general meeting calling for a report to shareholders on how first nations opposition would impact plans for the project. It failed, but gained 29% support.
NEI, which has pushed for executive compensation to be more closely tied to pipeline safety, the Globe reports, is now seriously weighing the benefits of sticking with Enbridge, and expects to revisit its position on the company following meetings with management and the board in September and November.
“We are kind of running out of rope here on Enbridge,” Bob Walker, NEI’s vice president of sustainability told the Globe. “Typically we see things moving in a more progressive direction. With Enbridge, things seem to be going from bad to worse.”
Monday, July 30, 2012
Nexen takeover: Losing an ESG leader
CNOOC Ltd.’s takeover bid for Nexen raises concerns for responsible investors as the Chinese state-owned oil and gas company is an industry laggard on environmental, social and governance (ESG) issues, according to a recent corporate action alert published by Sustainalytics.
CNOOC has “significant gaps” in its ESG expertise, the report notes. “However, as integration moves ahead, responsible investors should keep a particularly close eye on CNOOC Ltd.’s performance related to social issues such as labour relations, human rights and community relations, with special attention to First Nations communities.”
The report points to CNOOC’s “weak” policies on the environment, human rights, bribery and corruption. In addition, the company’s ESG disclosure is of limited strength, there’s no evidence of a formal program to reduce greenhouse gas emissions, and policies on indigenous peoples’ rights and community engagement are lacking.
In contrast, Nexen has been an environmental leader in the oil and gas sector for a number of years, with operations either in line or beyond compliance, Sustainalytics says. “Of note are its strong environmental policy, its environmental management system and its track record on greenhouse gas emissions.”
“As CNOOC Ltd. becomes the operator of Long Lake, a major oil sands in situ extraction and upgrading site, responsible investors will expect higher levels of transparency and attention to environmental issues.”
Of particular concern for responsible investors, the report notes, is the disparity in how the two companies manage their human rights risks related to operations in sensitive countries. Nexen has a strong human rights record while CNOOC’s operations in Burma have faced allegations of human rights abuses.
“CNOOC is not, and, after acquiring Nexen, will not constitute an eligible investment for many responsible investors due to human rights issues in Burma.”
As demand for energy grows in emerging markets, the report concludes, natural resource acquisitions in politically stable countries will continue, and Chinese ownership in major oil and gas basins will grow.
“Given the state ownership of Chinese oil and gas companies, the need to target Chinese policy makers cannot be discounted. Regardless, responsible investor engagement on ESG issues in the oil and gas sector has to include Chinese companies in order to move the bar on environmental and social issues.”
Friday, June 29, 2012
Sustainalytics acquires Singapore’s Responsible Research
Sustainalytics today announced the completion of an agreement to acquire Responsible Research, a Singapore-based provider of Asian and emerging markets environmental, social and governance (ESG) research and analysis. The deal was first announced in March.
Responsible Research's core analyst and institutional relations team will remain intact and continue to operate out of a new office in Singapore. The deal will also see Responsible Research's shareholders, including Lucy Carmody and Melissa Brown, become shareholders of Sustainalytics.
"The addition of the highly-respected Responsible Research team means our clients around the world will have access to leading-edge, regionally-informed insights into Asian and emerging markets," said Sustainalytics CEO Michael Jantzi. "This is another step in fulfilling our commitment to clients to provide ESG solutions that add value to their investment decision-making processes."
Melissa Brown, Responsible Research board member said, "Asian investors have long needed a world class ESG research provider. We believe that the combination of Responsible Research's Asian expertise with Sustainalytics' global coverage will ensure that investors have the best local coverage and an international product range that only a global leader like Sustainalytics can bring. "
Friday, June 22, 2012
On track for Rio + 20: EIRIS's take
At the top of the list is Puma. No surprise given the accolades the company has received for its ground breaking environmental profit and loss reporting. (Remember that the next time you go out to buy a pair of casual or athletic shoes.) A number of pharmaceutical companies were highly ranked, and Ms. Hayles explained that this was due to fact that the ratings assigned weight to the product that is made, and big pharma does deliver a range of health providing and disease fighting products.
While Ms. Hayles went through some of the data and methodology quite carefully with us, the sustainability ratings themselves are intended to be simple. The ratings provide a complete picture of corporate sustainability performance, expressed on a clear A-E Scale, and combine EIRIS' assessment of a company’s sustainability impacts with analysis of management response to ESG risks.
Ms. Hayles also discussed two new initiatives EIRIS is supporting at RIO+20, the Natural Capital Declaration (NCD) and the Corporate Sustainability Reporting Coalition (CSRC).
The NCD is a declaration by the financial sector demonstrating their commitment at the Rio+ 20 Earth Summit to work towards integrating Natural Capital considerations into financial products and services. The 39 banks, investors and insurers who now back the Natural Capital Declaration joined forces with more than 50 countries including Botswana, the Philippines, South Africa and the United Kingdom, as well as corporations such as Unilever, Puma, Dow Chemical and Mars Incorporated, to make a collective call for natural capital valuation and accounting.
The CSCR is urging all nations at Rio+20 to commit to develop an international policy framework fostering the development of national measures requiring, on a report or explain basis, the integration of material sustainability issues within the corporate reporting cycle of all listed and large private companies. In a wonderful example of how companies are always a mix of the good, the bad and the ugly, the sponsor of the CSCR is Aviva, who recently got into a spot of trouble over executive compensation.
We’ll have more on these two initiatives as developments unfold.
Wednesday, June 20, 2012
Paul Martin Speaks on Canada's Natives
“It's the greatest social problem of our time.” That's how former Prime Minister Paul Martin described the plight of Canada's aboriginal community, speaking on Wednesday at the Canadian Responsible Investment Conference in Montreal.
“We have engaged in actions that are beyond belief and we continue to do so,” Martin said. “We're making it impossible for them [aboriginals] to succeed.”
To that end, Martin pointed to his own initiative, the $50 million CAPE fund, set up to invest in aboriginal communities. “We want to create a class of aboriginal entrepreneurs.”
Martin noted that the private sector can assist in such ventures, but government should help out.“Tax incentives are required because the major return is a social return.”
Martin discussed a few other issues during a hour-long interview with Gary Hawton, the president of Oceanrock Investments and the incoming president of the Social Investment Organization. (Hawton was also the winner of the 2012 SRI Distinguished Service Award):
Paul Martin on the Oil sands: “The oil sands are a huge economic asset but they have to operate in an environmentally sustainable way.”
Europe: “The Europeans are cutting when everyone else is. It's driving their economy into the ground.”
“You need institutions to make the euro work. Europe won't come through this crisis unless they focus on a political union.”
The Occupy movement: “If things continue as they are, we're going to have some huge issues.”
Highlights of the Canadian Responsible Investment Conference
Use the link below or click here
http://socialfinance.ca/blog/post/highlights-of-the-canadian-responsible-investment-conference-sri20-the-futu
re-posted with permission from Social Finance
Tuesday, June 19, 2012
Sustainable investment seen as megatrend
Sustainable investing is a megatrend, a societal and economic shift akin to globalization, says Concordia University adjunct professor Amr Addas, speaking today at the Canadian Responsible Investment Conference in Montreal.
“It's a tremendous business opportunity and a strategic imperative for corporate leaders,” Addas said in a morning session aimed at financial advisors.
Managers can no longer afford to ignore sustainability, he said, noting that 67% believe that sustainability is a key to competitive success.
Addas made note of the exponential growth of ESG-focused investment funds and the myth of underperformance. “Pure ESG strategies have outperformed massively,” he said. “It's unequivocal.”
Still, “there are plenty of cynics,” noted Tessa Hebb, director of the Carleton Centre for Community Innovation. “Mainstream beliefs in the financial system run counter to this [sustainability] view.”
On the plus side, there are plenty of good SRI products on the market, said Edmonton-based investment advisor Gail Taylor. “You can give your clients a whole new comfort level.”
“Ultimately, the business case will win out,” said Truscost Senior Vice President Cary Krosinski. “It's about the bottom line.”