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Workers’ Capital News - Feb 10

In this issue:

  • Governance and Disclosure

    JTUC-RENGO distributes formal ESG guidelines for pension funds / Sweden says EU corporate governance proposals “counterproductive”

  • Shareholder Activism

    Total faces investor resolution on risks of Canadian oil sands / Accenture under fire from shareholders for Chamber of Commerce involvement

  • Pensions and Investments

    UK failing pensions system to undergo review

Governance and Disclosure

JTUC-RENGO distributes formal ESG guidelines for pension funds

JTUC-RENGO, the nation’s trades union confederation, has released a set of guidelines for Japan’s pension funds on incorporating environmental, social, and governance (ESG) factors into investment decision-making processes. The guidelines were undergoing finalization at the close of 2010, and are billed as educational tools for trade unions (both industrial federations and company-based unions) to “practice responsible investment of pension funds and other workers’ capital”.

Responsible Investor reports that, given the fact that almost half of Japan’s corporate pensions schemes are linked to RENGO, the new guidelines could greatly influence Japanese retirement funds’ integration of ESG considerations for the positive.

Along with the release of their new guidelines, the trades union confederation is also pressuring Japan’s Government Pension Investment Fund (GPIF) to develop policies for responsible investment. RENGO’s request is backed by an OECD recommendation that advises GPIF to integrate ESG and become a UNPRI signatory, in order to keep pace with other reserve funds in the international community. For more on the OECD’s recommendation to the GPIF, please read the CWC In Focus article on ESG integration in GPIF.

Sweden says EU corporate governance proposals “counterproductive”

As reported by Responsible Investor, the Swedish Corporate Governance Board (SCGB) has heavily criticized the European Commission’s corporate governance (CG) guideline plans, labeling the EU’s claim that poor CG fueled the financial crisis as “unsubstantiated”.

The EU’s green paper on corporate governance, set to be released this April, will support a strong theme of regulation. For example, the organization may perhaps even enforce ESG disclosure as mandatory for corporations. However, the SCGB claims that such a prescriptive and heavily regulated approach to CG, if instated by the EU, will prove counterproductive in comparison to successful Swedish and Nordic CG models.

Shareholder Activism

Total faces investor resolution on risks of Canadian oil sands

Responsible Investor reports that at its AGM this May, the oil corporation Total will face a shareholder resolution on the risks of oil sands development from French investor PhiTrust Active Investors.

Companies planning to undertake oil sands development have been challenged by environmentalists, investors, and critics alike on the hazards that their operations create, which range from C02 emissions to other environmental footprints such as tailings and water consumption. As such Total, like oil firms Shell and BP, has faced criticism regarding the risks of its tar sand operations in Alberta, Canada.

PhiTrust, a UNPRI signatory, will present the resolution in collaboration with Greenpeace France and the U.S. campaign group Natural Resources Defense Council.

For background information and investor risks associated with Canadian oil sands, please review the CWC campaign page on Canadian Oil Sands.

Accenture under fire from shareholders for Chamber of Commerce involvement

A coalition of investors have heavily criticized Accenture, a global consultancy group, for claiming support of sustainability values while simultaneously engaging with the U.S. Chamber of Commerce (COC).  Responsible Investor reports that Accenture is a member of the COC, and holds a position on the Chamber board. Accenture claims to place heavy emphasis on environmental issues in their corporate reports. However, their involvement with and support of the COC – an organization well-known for actively opposing climate issues-based policies – has investors accusing the consultancy group of hypocrisy.

Similarly, other companies and organizations such as IBM, Pepsi, and Pfizer have also faced shareholder resolutions regarding their Chamber board membership. The COC has also undergone criticism on issues outside of climate change, such as proxy access and say-on-pay, the latter being an issue currently being debated by the Securities and Exchanges Commission (SEC).

Pensions and Investments

UK failing pensions system to undergo review

Global Pension reports that an independent commission has been established to critically review and make recommendations for UK’s current failing private pension system. The Workplace Retirement Income Commission was called in light of a new finding that UK governments have enacted approximately 800 pieces of pension legislation since 1995, meaning an average of one new bill every week since then.

Given the troubled state of UK pensions, former Treasury Select Committee chairman Lord McFall states a need to assess the system and discover a more sustainable means for citizens to save for retirement. The UK shadow pensions minister Rachel Reeve was also in agreement, emphasizing that although the government had indeed made considerable efforts in the pensions sector such as workplace auto-enrolment, further action should be taken to ensure that retirement is affordable for all workers.

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