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 The news that shaped the week in responsible investing 


Dear SRI reader,

Reading the signs is important for us all, especially investors.

Recognising the seriousness of climate change is child's play for some, while others still fight it as if doing so would reduce the gravity of its consequences. There have been quite a number of advances in in the way investors recognise the financial implications of climate change and yet, there is still quite clearly a long way to go. This statement echoes the message given by John Hewson, the chairman of the Asset Owner Disclosure Project to the Guardian as he explained how the AODP’s
fifth global index indicates that 50 of the largest asset managers recognise the materiality of climate change for their portfolios. On the downside, 40% of asset owners and 6% of asset managers are still considered as laggards.
The game of denial continues as Exxon Mobil’s board refused to support a climate change resolution backed by investors with over USD10 trillion in assets under management. At its upcoming AGM, at the end of May, Exxon has advised its shareholders to vote against the resolution to disclose how resilient its portfolio and strategy is to global transition to keeping climante change to less than 2°C. By doing this, the company continues to be opaque to its investors on how it is managing to limit global warming impacts in their portfolio, putting both at risk.

Recognising the importance of conjuring up as many relevant stakeholders as possible to embark on a speedy journey to a more sustainable economy, Eurosif
 explored the relevance of Sustainable Development Goals (SDGs) for SRI investors and tried to map the extent to which investors can use them and how. We asked our readers to tell us which SDGs were most relevant and which are the most suited approaches to reflect their investment choices. The need to capitalise on the private sector’s resources represents an opportunity for investors who are already keen on SRI.
Happy reading,
Flavia Micilotta
- Eurosif's Executive Director
ISO 20400: New standard launched to support sustainable procurement (edie) Organisations looking to integrate sustainability into procurement processes can now adopt the world's first international standard for sustainable procurement, which aims to increase supply chain transparency. The new standard has been created with the input of experts and industry bodies from than 40 countries.
Most global investors recognise financial risk of climate change, report finds (The Guardian) For the first time a majority of global investor heavyweights recognise the financial risks of climate change, according to the results of a major global index. But despite the advances, the Asset Owner Disclosure Project chairman, John Hewson, has warned there is still an “enormous resistance” to managing climate risk.
UAE joins global fight against offshore tax evasion (International Adviser) The UAE’s ambassador to France has signed the multilateral convention on mutual administrative assistance in tax matters. The UAE is the 109th country to sign the treaty and will begin exchanging information by 2018.

LuxFlag to launch ‘Green Bond’ label (Environmental Finance) The Luxembourg Finance Labelling Agency (LuxFlag) will launch a ‘Green Bond’ label later this year. LuxFlag currently awards funds with four different labels - climate finance, environment, ESG and microfinance. This will be the first time it has turned its attention to a bonds.

Despite Its Oil-Industry Past, Energy Transitions Commission Foresees A Full-Renewables Future (Forbes) Renewables could provide nearly all the power in some regions in less than 20 years, reliably, and at a cost competitive with fossil fuels, according to a report released today by the Energy Transitions Commission.
Is employee activism on sustainability nearing a tipping point? (GreenBiz) A new survey shows that nearly two-thirds of those who work for large U.S. corporations want their employers to actively take on environmental and social issues. The survey — of a random selection of nearly 1,300 U.S. employees of Fortune 1000 companies by St. Louis-based Povaddo LLC, an issues management firm — found strong support for employer environmental and social action across age, gender, region, employment level, ethnicity, income, company size and other factors.
Total outstanding green bond issuance speeds past $200bn (Environmental Finance) A record breaking first quarter helped total outstanding green bond issuance smash the $200 billion figure, according to the Green Bond Database published by Environmental Finance. Green bonds that helped push past the $200 billion mark include two municipal green bonds from Massachusetts and a €1 billion ($1.085 billion) issue from TenneT.
ECB's planned pension fund reporting requirements criticised (Investment & Pensions Europe) The planned European Central Bank (ECB) regulation on statutory reporting requirements for pension schemes could lead to extensive reporting obligations – and considerable additional costs – for pension institutions, according to speakers at a recent roundtable event in Frankfurt.

Fears grow over advisers’ investment due diligence (Fund Strategy) Concerns are being raised advisers are not carrying out robust due diligence when it comes to fund selection, with insufficient attention paid to asset management charges.

Axa IM announces £150m coal divestment (Fund Strategy) AXA Investment Managers has followed in the footsteps of its parent group as it divests from companies in its portfolio most exposed to coal. Effective from 30 June 2017, the asset manager will divest from companies that derive more than 50 per cent of revenues from coal-related activities, which will hit €177m (£150m) of fixed income and equities assets.
UK pension funds failing to protect worker rights in investment policies (Investment & Pensions Europe) UK pension funds lag their peers in the rest of Europe when it comes to having responsible investment policies referencing labour rights, according to a study by the International Transport Workers’ Federation (ITF).

Asset Managers
Fears of fragmentation over Basel shadow banking rules (Risk) What’s an international standard setter to do when they cannot get members to agree on an international standard? The answer from the Basel Committee, it seems, is to gently encourage members to decide their own rules locally instead. A masterplan to complete the Basel III risk-based capital framework has stalled owing to infighting between the U.S. and Europe.
Exxon board fights climate resolution (Environmental Finance) ExxonMobil’s board has refused to support a climate change resolution backed by investors with over $10 trillion in assets under management (AUM). The resolution, lead co-filed by the Office of the New York State Comptroller and the Church Commissioners for England, calls on Exxon to disclose how resilient its portfolio and strategy is to global transition to keeping climate change to less than 2°C. 

Credit Suisse braced for shareholder revolt over executive pay (Financial Times) Credit Suisse is braced for a shareholder revolt this week over compensation for its top managers, despite the Swiss bank’s executive board agreeing a voluntary 40 per cent cut in its bonuses.

Lombard Odier launches global ESG equities fund (Environmental Finance) Lombard Odier Investment Managers (IM) has launched a global environmental, social and governance (ESG) focused equities fund, as it ramps up its of impact investment offerings. The Swiss asset manager earlier this year launched a green bond fund, in partnership with UK-based ESG bond investor Affirmative Investment Management.

"There is a mismatch between regulatory incentives and the financing needs of the economy."

Wolfgang Kirsch, CEO of DZ Bank, on the 'Transformation of Long-term Financing' panel at the Frankfurt Finance Summit on Wednesday.
New Members
Eurosif is happy to welcome J.P. Morgan AM and LuxFlag to our network! If you would like to know more about joining Eurosif, please don't hesitate to get in touch.
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