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

This week, the insurance sector ranked a notch higher than other asset owners in the responsibility world. In the Netherlands, the industry has demonstrated stronger exclusion policies on tobacco compared to the pension funds sector in the country. The Heart Foundation, a charity dedicated to fighting heart disease, has commissioned a study to monitor the interest of the pension funds by looking at their commitment in their investments. Surprisingly, or not, once compared with insurance players, Dutch pension funds did not score very well. In the country that's home to many of the largest pension funds in Europe, the pension funds tend to lack a formal commitment in this area, though a good percentage have already moved ahead with divestments.

Looking at the man in the mirror, investors are increasingly realising that what really makes a difference in their investment strategy is a better understanding of the companies they invest in and "how" they manage sustainability as both a challenge and an opportunity. Integrating ESG in portfolios means looking for future proofed business. For this reason, "ESG-based investing and insurance companies are a natural fit" to echo the words of Jessica Ground, Schroders' Global Head of Stewardship in an interview with Environmental Finance. Ground highlights how the long-term view of sustainable investors is an important lever for investment’s future rewards.

The G20 Finance Ministers Meeting opens with
Mark Carney’s letter to the finance chiefs on the importance of accountability. Carney’s warning is a reminder of the persistent scandals in the financial sector and a call for making financial benchmarks more trustworthy and individuals more responsible. A powerful message that should be acted upon.

Happy reading,

Flavia Micilotta
- Eurosif's Executive Director

New rules on Shareholders' rights and transparency - Final European Parliament vote (European Parliament Press Release) On Tuesday, the European Parliament adopted the revised Shareholders' rights directive, which was presented by the European Commission in April 2014. The final adoption step will take place in the European Council shortly. The directive will enter into force two years after its publication in the official journal.

Pension funds less tough on tobacco than insurers (Investment & Pensions Europe): Dutch insurers have much stronger exclusion policies on tobacco industry investments than the country’s pension funds, a survey has revealed. The study, conducted by VBDO, the Association of Investors in Sustainable Development, and commissioned by the Heart Foundation found that an increasing number of pension funds were looking into the issue.

Interview: Insurers need to heed their own ESG experience when investing (Environmental Finance): Jessica Ground, global head of stewardship at Schroders, argues that insurers are a natural fit for ESG investing.

The G20's accomplishments, 10 years after the crisis (Trésor Economics)
The climate finance architecture the world needs (Eco-Business): To enable sustainable development and protect communities against the worst impacts of climate change, we need to fix the climate finance architecture to ensure finance gets to where it is needed, writes WRI researchers.

Report: Big businesses falling 'overwhelmingly behind' on human rights (edie): A large majority of businesses are in danger of falling "overwhelmingly behind" on human rights issues, according to a new report which benchmarks the ethical performance of some of the world's biggest businesses.

Shareholders focus on environment, corporate political activity in proxy proposals — report (Pensions & Investments): The environment and corporate political activity remain key areas of focus for shareholder proposals this proxy season, although the number of proposals on board and workplace diversity and pay equity is up significantly, said a report released Wednesday by non-profit shareholder advocacy groups As You Sow, Sustainable Investments Institute and Proxy Impact.

World Bank launches SDG bonds (Environmental Finance): The World Bank has launched a €163 million ($172 million) index linked bond that will directly link returns to the performance of companies advancing the global development priorities set out in the Sustainable Development Goals (SDG). Coupon payments from the 15-year bond are directly linked to the stock performance of companies included in the Solactive Sustainable Development Goals World Index.

Danish pension funds present plan for non-guaranteed pensions (Investment & Pensions Europe): The Danish pensions and insurance association, Forsikring & Pension (F&P), has published a plan to increase transparency for a proposed new breed of non-guaranteed pensions. The industry body said it was bringing forward the unveiling of the four-point proposal in response to the regulator’s recent call for a debate on the increased pensions risk individuals were being asked to take on.

French pension funds contest new management reform issued (Investment Europe): French ministries of Social Affairs and Finance have unveiled a new decree amending the financial management of French pension funds after the first version released in June 2016 was challenged by the interested parties. It appears however that the second version, due to enter in force on 1 July 2017, is still contested by a number of pension funds.

Long-term investors are reaching out to activists for help (Institutional Investor): Long-term investors are engaging more with activists to shake up poorly run companies and improve their performance for shareholders, according to a recent survey by corporate governance consulting firm Morrow Sodali.

Iceland has ended capital controls (Investment Europe): Investors in Iceland will henceforth be able to buy and sell assets abroad after the government announced a final lifting of capital controls in place since the country was forced to respond to the near-bankruptcy forced on it through the credit crunch and ensuing global financial crisis, which saw an implosion in the country’s banking sector.
Fitch warns of ‘growing polarisation’ between insurers and asset managers (Modern Investor): The Standard Aberdeen merger will heap pressure on mid-sized firms as investors becoming increasingly drawn to ‘one-stop’ fund houses or more nimble, smaller players. That is according to ratings agency Fitch Ratings, which said increased consolidation could lead to a close polarisation between large, global players and smaller, specialist companies.

Exclusive: BlackRock vows new pressure on climate, board diversity (Reuters): BlackRock Inc(BLK.N), which wields outsized clout as the world's largest asset manager, planned on Monday to put new pressure on companies to explain themselves on issues including how climate change could affect their business as well as boardroom diversity.

French Asset Managers More Cheery Than Global Peers on Vote Risk (Bloomberg) Far from Paris, global investors fret about the risk across asset classes of anti-European Union candidate Marine Le Pen winning France’s presidential election. Yet the country’s biggest money managers, who together oversee $3 trillion, are holding on to their European equity positions. Amundi and Axa Investment Managers are among those who are sanguine about vote’s eventual outcome.

AMP Capital launches ethical framework (Institutional Asset Manager) Under the framework, AMP Capital considered all sectors in which it invests and has concluded that manufacturers of tobacco, cluster munitions, landmines, biological and chemical weapons do not meet the minimum ethical standards required and will be excluded from its investable universe. Approximately AUD440 million worth of tobacco manufacturing-related equity and fixed income holdings will be divested from AMP Capital’s portfolios. This is the largest divestment of tobacco securities to date in Australia.
Quote of the week
"No country in the world can tackle the major international problems of our time alone."

Sigmar Gabriel, Germany's Foreign Minister, at the G20 Foreign Ministers Meeting on Wednesday the 15th. 
Copyright © 2017 Eurosif, All rights reserved.

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