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Workers Capital News - October 20

In this issue:

Governance and Disclosure

Supply Chain Transparency Act, California, USA

California governor Arnold Schwarzenegger announced on September 30th 2010 that he had signed the California Supply Chain Transparency bill (SB 657), citing that its enactment would “increase transparency, allow[ing] consumers to make better, more informed choices and motivate businesses to ensure humane practices.

The Business and Human Rights Resource Center reports that 32 investment and research firms supported this legislation, which requires all retailers and manufacturers operating in California to disclose their individual policies to eradicate slavery and human trafficking from their supply chains.  The legislation affects around 3,200 global companies.

Korea changes investor approach

According to Global Pensions ,  South  Korea’s national pension service is renouncing its previous passive-investor approach in favour of exercising a more vocal position on issues such as shareholder concerns, responsible investment, and corporate governance. The state fund foresees its efforts to become more active in ESG issues as its key to growth.

Shareholder Activism

NewsCorp came under shareholder pressure at its last meeting on 15 October 2010. Led by the Nathan Cummings Foundation and with the support of US labour pension funds, shareholders called on the News Corp Board to disclose the extent of its political spending. This move came in the wake of news that Chairman and CEO, Rupert Murdoch admitted to have directed at least US$ 2 million in political contributions from the corporate treasury because of his personal relationships and political agenda, not because the expenditure furthered the interest of the company or its shareholders.  Link to the story here.

Pensions and Investments

Bloomberg reports that on October 19th 2010, unions staged the fourth national strike and the sixth day of protests in two months against France’s pension reform bill. The reforms propose an increase the minimum retirement age from 60 to 62 and the age for a full pension from 65 to 67.  The protestors included CWC member unions, the CFDT and CGT, which view the reforms as fundamentally unjust for workers.  See the CFDT slideshow of images from the protest and visit their website for further commentary.

Feature Section

New reports highlight rising SRI trends

ESG factors are now integrated at $6.8trn (€5trn) of internally active managed assets worldwide, according to the United Nations Principles for Responsible Investment (cited in Responsible Investor). The PRI has reported that such assets subject to integration by its 808 signatories now represents 7% of the total market, estimated at $121trn.The numbers come in the PRI’s new Report on Progress. The 60-page report analyses signatory progress and implementation. Of the 433 signatories who completed the PRI assessment survey, 166 have opted to disclose their responses.

A survey done by Aberdeen Asset Management revealed that in the first half of 2010, approximately 17% of requests for proposals (RFPs) by pension funds based in Europe have included questions on whether asset managers were signatories to the UNPRI (United Nations Principles for Responsible Investment.   The survey drew from a sample of 200 pension funds, studying approximately 400 RFPs issued over the last three years from these organizations.

RI also highlights that the (€8.8bn) New Zealand Superannuation Fund is looking at ‘Positive Investment’ – where social and environmental impact sits alongside investment performance.  During the year NZ Super integrated Responsible Investment into its standard due diligence questionnaire for selecting asset managers.  It has also emerged that the fund is finalising responsible investing property guidelines for its property investments

The 10th edition of Vigeo’s report Green, Social and Ethical Funds in Europe points to sustained growth in the SRI sector, well-evidenced since 1999, even though 2008 was marked by a pause linked to the financial crisis. The growth of the market between June 2009 and June 2010 was particularly strong, both in terms of number of funds (879 mutual funds, +29%) and assets under management (€75 billion, +41%).  A summary of the key findings is also available in French.            

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