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Workers’ Capital News - December 2013

In this issue:

  • Governance and Disclosure

    No longer an option - coverage of the UN Guiding Principles in the financial sector/ Release of the 2013-14 Global Climate Investment Index

  • Shareholder Activism

    Pay ratio disclosure in the US/ Engagement actionnarial en faveur de l’Accord sur la sécurité au Bangladesh

  • Pensions and Investments

    TUC Annual Fund Manager Voting Survey released/ UK attempts to curb excessive pension charges stalled

Governance and Disclosure

No longer an option - coverage of the UN Guiding Principles in the financial sector

The CWC took part in the second United Nations Forum on Business and Human Rights held 2-4 December in Geneva to call on asset owners – and pension funds in particular – to take a leading role in supporting effective application of the UN Guiding Principles on Business and Human Rights to the financial sector. Represented by Pierre Habbard (TUAC & ITUC), CWC contributed to a panel session chaired by Calvert with inputs from the OECD, UBS and BankTrack. For the CWC the application of the UN Guiding Principles should suffer no exemption. In particular, all forms and levels of shareownership, including minority ownerships, should qualify as a “business relationship” which is a central concept in the UN framework in determining whether an external party is “linked” to an adverse impact caused by a company – and one that was put at a test in a recent case brought under the OECD Guidelines for Multinational Enterprises (case of Korean company POSCO raising the potential shareholder responsibilities of APG and of the Norwegian Government Pension Fund). Read the full CWC blog post here.

Release of the 2013-14 Global Climate Investment Index

As reported in Responsible Investor, the Asset Owners Disclosure Project (AODP) released its second ranking report, the 2013-14 Global Climate Investment Index,  identifying how most of the world’s biggest investors are managing, or failing to manage, climate risk. This year’s report finds leaders are accelerating, underweight in high carbon investments and overweight in low-carbon ones. There are only 5 funds rated AAA or higher out of 460 rated (1%), including the Environmental Agency Active Pension fund (Europe), Local Government Super (Australia), CalPERS (US), PFZW (Netherlands) and VicSuper (Australia). The schemes that appear to be doing nothing to manage their carbon risk receive an “X,” and nearly 40 percent of rated funds are rated this way. Another 40 percent receive a “D” grade, meaning 80 percent of funds in the index are in the “laggard" category.

Shareholder Activism

Pay ratio disclosure in the US

The CWC collaborated with Bâtirente, SHARE and the ERAFP to coordinate an investor letter – including asset owners and asset managers from around the world with more than $700b assets under management – for the US Securities and Exchange Commission in favour of the pay ratio disclosure. This rule would require U.S. corporations to disclose the ratio between the income of their CEO and their median employee. See the updated CWC campaign page on pay ratio disclosure.

Engagement actionnarial en faveur de l’Accord sur la sécurité au Bangladesh

Cinq questions que les investisseurs devraient posés aux compagnies qui ont signé l’Alliance – l’entente rivale signée par des compagnies américaines et canadiennes. (Préparé par SHARE, Canada). Shareholder engagement in favour the Bangladesh Accord: Five questions that investors should be asking from companies that have signed on to the Alliance. (Prepared by SHARE, Canada) 

Pensions and Investments

TUC Annual Fund Manager Voting Survey released

The TUC has released its eleventh Annual Fund Manager Voting Survey, highlighting how various fund managers exercise voting rights in relation to controversial issues at company AGMs. There is evidence that some asset managers were more willing to vote against management over remuneration issues last year. There was also an overall reduction in the proportion of abstentions, whereas oppose votes increased, suggesting a tougher approach on the part of some investors. However, many asset managers continued to support managers on most issues most of the time.

UK attempts to curb excessive pension charges stalled

As reported in IPE, work undertaken by the UK Government to curb excessive pension fund fees has been challenged by the regulatory policy committee in review of its assessed impact on the pension industry. The policy proposal called into question is the option of setting a industry-wide charge cap in qualifying pension schemes, which was considered to have a net zero impact on the pension industry. Another option proposed is to require disclosure on charges by pension providers.

 *Please note that viewing linked articles requires registering for free in the case of IPE online, and a subscription in the case of Responsible Investor.

Disclaimer: The CWC News Digest is a compilation of news items covered in industry publications. The content does not necessarily reflect the views of the CWC or its members. Comments and reflections on news items may be sent to acard@share.ca

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