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

Consistency is the foundation of virtue, or at least it is in the world of philosophy. For the SRI and long-term investors community, consistency is at least a most definite asset. In 2015, the largest US public pension scheme, Calpers announced its loss as a result of blacklisting tobacco companies back in 2000. The loss was estimated at USD 3 billion in missed returns. The pension’s board voted in favour of assessing whether it should move back into the sector. With all eyes on them, at the end of 2016, Calpers decided in favour of consistency and went on to sell its last USD 550 million worth of tobacco-related investments. The investment committee did that in spite of the advice from its own financial advisers, who recommended reversing the tobacco sell-off, initially approved in 2000. Taking the long view meant a commitment to influence policy makers and make a statement to support the fact that tobacco stocks do not belong in public pension funds' investment portfolios. The issue came back this week as Norway’s Government Pension Fund Global’s equity portfolio is said to have missed out due to the exclusion of stocks on ethical grounds – including product based exclusions, counting weapons, thermal coal, and tobacco producers and suppliers. It will be interesting to see how the Norwegian pension fund will follow up and if it will choose the consistency path, upholding a responsible vision in line with a concept of fiduciary duty, which incorporates responsible investment principles. Perhaps asking whether pension funds should invest or not in tobacco is the wrong question. What matters is asking those who have not divested, how they are able to account for the damage to our economy and the resulting gargantuan public health costs for taxpayers.

Tomorrow, people across Europe will be celebrating the 60th anniversary of the 
Treaty of Rome, which set out a vision for an EU with an open market for goods, services, capital and people. Times are hard and what we expect from Europe today is not only to bring stability across members, but to foster a concept of sustainability which encompasses the national identities of member states, in a true European spirit.
In the last ten days, Eurosif and its members formalised their input to the CMU mid-term review and the PRIIPs consultations. You can find both on the links below.
Happy reading,
Flavia Micilotta
- Eurosif's Executive Director
 



 
ESG
Gig economy workers call for greater regulation and rights (Economia ICAEW) More than half of gig economy workers (57%) believe that gig economy firms are exploiting a lack of regulation, according to new research by CIPD. The research revealed that 4% of UK working adults aged between 18 and 70 - approximately 1.3 million people - are engaged in gig work in the UK.

Nestle, Mars vow to clean up pet food supply chains (Eco-Business) Swiss food giant Nestlé SA and US candy and pet food company Mars pledged on Thursday to take steps to ensure their pet food supply chains are free from human rights abuses and illegally caught seafood - in a move welcomed by campaigners.



EIB confirms new support for climate investment across eight Chinese provinces and joint green finance engagement with Chinese investors (EIB press release) Speaking at the start of a five day climate focused visit to China, the Vice-President of the European Investment Bank announced that Europe’s long-term lending institution provided EUR 298 million (2.2 billion CNY) to support investment in new environmental, energy efficiency and forestry projects across China last year. New cooperation between the European Investment Bank and the People’s Bank of China to mobilise greater support for green finance from institutional investors was also confirmed.


Country-by-country reporting finally arrives in Italy (Transfer Pricing Weekly) It is noteworthy that the Italian legislator does not distinguish between parent and subsidiary companies as regards first year of application, despite the relevant option in the EU directive.


Deutsche Börse to launch Sustainable Finance Initiative (Deutsche Börse) Deutsche Börse will be launching the Sustainable Finance Initiative in Frankfurt. The aim is to establish new interdisciplinary structures for sustainable entrepreneurship along with some 100 of the financial centre's key participants in order to explore new business areas. Banks, financial institutions, rating and ranking agencies, investors, insurance companies, data providers and representatives from the public, academic, NGO and church sectors will be involved.


OECD, IMF Reports On Providing Businesses With Tax Certainty (Tax News) The OECD and the International Monetary Fund have submitted to the Group of Twenty (G-20) nations a report on improving tax certainty for businesses. The report follows a global survey of more than 700 large, multinational businesses and a survey of 25 advanced nation tax administrations. The report highlights several reasons for heightened concerns about tax uncertainty, including updates to the international tax rules proposed in the base erosion and profit shifting (BEPS) recommendations.


EC unveils eagerly awaited consultation on ESAs (Investment & Pensions Europe) The European Commission has launched a long-awaited consultation on the future operation of the three European Supervisory Authorities (ESAs). The consultation had been expected in the second half of last year.

 
INVESTORS
Swiss association recommends arms company exclusions (Investment & Pensions Europe) The Swiss responsible investment association, SVVK-ASIR, has identified 15 arms companies its members – major Swiss pension funds – should not invest in. The 15 companies are from India, Israel, Romania, Russia, South Korea, and the USA. They are considered to make products that violate Swiss law and internationally recognised conventions, such as the Ottawa Convention – banning anti-personnel mines – and the Oslo Convention on cluster munitions.

Trump's budget to gut EPA - investors' verdict (Environmental Finance) President Donald Trump’s proposed “America First Budget” will see the Environmental Protection Agency (EPA) budget slashed 31% in 2018. The move, which will cut the budget by $2.6 billion to $5.7 billion has been slammed as “reckless” and will see the department cut 3,200 jobs.



Small Italian Investors Are Trembling At MiFID II (Market Mogul) A far-reaching change in the valuation rules for banks that are not listed in financial markets is happening in Italy – thanks to MiFID II. And, as was anticipated by many analysts, the chances for a large number of savers to discover that their investments in such banks actually worth much less than what they thought are extremely high.

Investors to Cohn: Don’t Be Messin’ With Our Rights (Institutional Investor) A group of institutional Investors representing $65 trillion ask Trump's National Economic Council head to avoid changes to shareholder rights rules.

Norway wealth fund misses out on returns due to divestment, Norges says (Pensions & Investments) Norway’s Government Pension Fund Global’s equity portfolio missed out on 1.1 percentage points of additional gain due to the exclusion of stocks on ethical grounds over the past 11 years, according to Norges Bank Investment Management, which manages the sovereign wealth fund’s assets.
 
ASSET MANAGERS
JP Morgan forms sustainable investment team and launches fund (Modern Investor) JP Morgan Asset Management has formed a new sustainable investment team and launched a new sustainable equity fund, the company has announced.

EFAMA proposes digital passport for pan-European fund access (Investment Week) The European Fund and Asset Management Association (EFAMA) has proposed the introduction of a "digital passport" to facilitate the distribution of asset management products across EU borders.  EFAMA said that although there has been "high interest" from asset managers in the distribution of services via a single on-line platform across the EU, there are currently a number of barriers to entry.


EU market participants too busy for CMU (Asset Servicing Times) EU financial market participants are too bogged down in regulatory implementation to make the most of capital market opportunities, according to a BNY Mellon regional chief. Mark John, head of product and business development for Europe, the Middle East and Africa at BNY Mellon, has warned that many market participants are currently too focused on “keeping their heads above the water with the pace of regulatory change” to make full use of the opportunities that the capital markets union (CMU) offers.

PME to link 10% of assets to UN sustainability targets (Investment & Pensions Europe) The €45bn Dutch metal industry scheme PME said it will improve its ESG policy by linking 10% of its assets directly to United Nations sustainability targets over the next five years.


Actiam targets water-neutral portfolio by 2030 (Investment Europe) Dutch asset manager Actiam seeks to achieve a water-neutral investment portfolio by 2030. The company has unveiled its first water-investment footprint on the occasion of the World Water Day (22 March). 
Quote of the week
"Green business is good business."

António Guterres, Secretary General of the United Nations, speaking at the High-Level SDG Action Event on Climate Change, on Thursday.
Copyright © 2017 Eurosif, All rights reserved.


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