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The news that shaped the week in responsible investing
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Dear SRI reader,

Some of this week’s events have stirred mixed reactions among stakeholders, underlining the importance of accountability at both political and corporate levels.

Quo vadis Europa? The European MEPs received President Juncker’s 5 scenarios for Europe this week, as the debate on the White Paper heated up. Difficult to say what Europe will choose later this month as the heads of state are called to discuss and decide the next way forward, on the 60th anniversary of the Treaty of Rome.

Quo vadis Business and Human Rights? Professor Ruggie was ‘deeply troubled’ this week, regarding the recent discussion paper by a group of banks about the principles that bear his name. The report was a
document from the Thun Group, an informal 11-member banking consortium that includes UBS, Barclays, and BNP Paribas, among others. The report claimed that banks are liable for “adverse human rights impacts caused or contributed in their own activities”, but not those they finance. As creator of the United Nations Guiding Principles (UNGPs) on Business and Human Rights, Ruggie's indignation underlines the limitations of business showing proper accountability for their responsibility, in this case, to uphold human rights. Ruggie stressed the extent to which the Thun Group's report poses a threat of confusing the common understanding of the initial work of the UN Human Rights Council unanimous endorsement of the UNGPs in 2011.

Also some good news this week, as the EU Parliament's ECON Committee voted to end secrecy around the ultimate beneficial owners of companies and trusts active in the EU, as part of the revision of the 4th Anti-Money Laundering Directive. MEPs required full disclosure of owners behind trusts. Extending public disclosure requirements to all types of trusts including non-commercial trusts, gives a strong signal, as the Parliament goes beyond the initial
proposal made by the Commission in July 2016. Will the Council follow suit? We shall see.

Happy reading,

Flavia Micilotta
- Eurosif's Executive Director
 






 
ESG
CDC says green label helps shelter €500m bond from volatility: French development institution Caisse des Dépôts et Consignations (CDC) has issued its inaugural green bond, saying that the green label helped shield the deal from the volatility shaking the country’s fixed income markets. “In the context of the last week in the French market, the fact it was green helped stabilise the price,” said Frédéric Bonnardel, project manager – financing department at CDC group. “I don’t know if it had an impact on the price, but in the context of high volatility, it helped.” French bond markets have proved volatile recent days as investors react to the twists and turns in the French presidential race.

European Parliament vote on beneficial ownership transparency: Today, Transparency International EU welcomed the European Parliament’s committee vote to end secrecy around the ultimate beneficial owners of companies and trusts, in revisions to the 4th Anti-Money Laundering Directive.

L'Oreal, Chanel and Nespresso pioneer 'carbon insetting': What if companies could support carbon offset projects within their direct supply chains? What if they could offset some portion of their carbon emissions by financing targeted forestry initiatives to bolster their supply chains and ensure reliable procurement of key natural ingredients? They can, through a new practice called "carbon insetting." Unlike traditional carbon offsetting, insetting is about much more than carbon sequestration. It’s about companies building resiliency in their supply chains and restoring the ecosystems on which their growers depend. Insetting takes a holistic approach, tackling both environmental and social challenges, largely poverty among smallholder farmers.

Trading in European renewables certificates rises 80% in five years: Demand for renewable energy 'Guarantees of Origin' (GOs) in Europe has risen by more than 80% between 2011 and 2016, according to industry statistics. GOs are issued to power producers for each MWh of renewable energy generated, in the same way as Renewable Energy Certificates (RECs) in the US. They can be traded on the Leipzig-based European Energy Exchange.

World's first green bond ETF launches: The world’s first green bond index-linked exchange-traded fund (ETF) is set to be listed on the Euronext Paris Thursday, after its received the green light from EU regulators. The fund, which has been passported to 11 different European countries, was launched by ETF provider Lyxor Asset Management.

Ruggie “deeply troubled” by banks’ discussion paper on human rights principles: Professor John Ruggie, the architect of the United Nations Guiding Principles (UNGPs) on Business and Human Rights and probably the world’s leading voice on human rights and investment, has said he is “deeply troubled” by a recent discussion paper by a group of banks about the principles that bear his name.
 
INVESTORS
New ExxonMobil CEO calls for socially responsible energy as investors re-file climate proposal: A coalition of institutional investors with $4trn under management, led by New York State Comptroller Thomas DiNapoli and the Church Commissioners for England, have re-filed their climate change disclosure proposal at oil major ExxonMobil that gained a massive 38% support last year.

AP3 doubles green bond investments, posts 9.4% annual gain: Sweden’s third national pension fund, AP3, made a 9.4% return on investments last year, after expenses, boosted by equities, inflation, and currency risk. This is up from the 6.8% it generated in 2015, the fund reported.


FCA launches consultation paper on IPO process: The FCA has launched a consultation paper on the IPO process with the aim of increasing transparency for potential investors. The consultation paper follows the FCA’s discussion paper, published in April 2016, which found the quality of information provided to potential investors needs improving, and the point at which it is offered should be reviewed.

Securities lending lessons for responsible investors: Securities lending is not usually associated with responsible investment, but given the right approach it can bring in incremental income without sacrificing principles.
 
ASSET MANAGERS
New Nordic ecolabel for investment funds almost ready for launch: Most retail investors have never heard of UNPRI, Morningstar, or Morgan Stanley ESG framework. But more and more retail clients are showing interest in putting their money in sustainable investments. A new labeling is planning to show them the way. The Nordic Swan Ecolabel has decided to move into new territory and give out ecolabels to investment funds that fulfill certain criteria. Already by the end of June this year, it will be possible to be certified by the Nordic Swan Ecolabel.

Pension funds urge Unilever to stick to long-term policy: Several large Dutch pension funds have urged Unilever to refrain from increasing shareholder value at the expense of its long-term policy. In an open letter, the metal schemes PMT and PME, as well as their €114bn asset manager MN, said the multinational company should keep its focus on sustainability and return for the long term.In the pension funds’ letter, the metal schemes said that “creating real shareholder value meant a long-term focus”.

 
Quote of the week
"Every company, no matter how big or small, has to pay its taxes where it makes its profits."
 
Jozef Vasak, Economic Governance and European Semester Advisor to the Representation of the European Commission to Austria, speaking at the Model European Union Vienna 2017 event, following the European Parliament's vote on beneficial ownership transparency. 
Copyright © 2017 Eurosif, All rights reserved.


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