GLOBAL – Investor groups are calling on the governments of the world's largest economies for a new dialogue on climate change.
The four regional climate change investor groups – IIGCC, INCR, IGCC and AIGCC – also announced the formation of the Global Investor Coalition on Climate Change (GIC) to represent the international investment community on climate change policy and investment issues at a global level.
The GIC, which will be working closely with other networks including UNEP FI, PRI and the Carbon Disclosure Project (CDP), will provide a focal point for engagement with international policymaking bodies.
The investors say the re-election of US president Barack Obama, the leadership transition in China and the upcoming gathering of policymakers in Doha for the UN climate change conference on 26 November provide an opportunity for governments to advance the ambitious policies necessary to reduce emissions substantially and mitigate their potential impact on the world.
In an open letter they call for clear, consistent and predictable policies that encourage low carbon investment, and knowledge-sharing between governments on effective climate and clean energy policies, building on successful existing national and regional measures.
They are also calling for stronger international agreements that send clear market signals about the future of climate policy and reductions in greenhouse gas emissions.
The letter was prepared by the European Institutional Investors Group on Climate Change (IIGCC), the North American Investor Network on Climate Risk (INCR), the Australia/New Zealand Investor Group on Climate Change (IGCC), the Asia Investor Group on Climate Change (AIGCC) and UNEP FI.
It is also supported by the UN-backed Principles for Responsible Investment Initiative (PRI).
Meanwhile, 254 new signatories joined the PRI between 12 September 2011 and 9 November 2012, bringing total signatory numbers to more than 1,100, drawn from 50 countries and managing assets of more than $32trn (€52trn).
Over the same period, 61 were delisted. Signatories are delisted if they do not pay the mandatory annual membership fee or participate in the annual reporting and assessment process, or if they choose to voluntarily leave the initiative.
However, no signatory was delisted during the period for failing to report, as this process was voluntary this year while the new PRI reporting framework was piloted.
Signatories may also be delisted because they have merged with, or been acquired by, another signatory and therefore remain part of the PRI community.
The full lists of new and delisted signatories can be found here.
In other news, the 2012 Report on Sustainable and Responsible Investing Trends in the US has found that sustainable and responsible investing (SRI) accounted for 11.2% of all assets under professional management in the country at year-end 2011.
According to the report, $3.7trn out of $33.3trn of investment assets is held by individuals, institutions, investment companies or money managers that practice SRI strategies, an increase of 22% since year-end 2009.
The report by the US Forum for Sustainable and Responsible Investment (US SIF) found that concerns about business ties to repressive or terrorist regimes, other country-specific criteria and interest in corporate governance were the top issues for sustainable and responsible institutional asset owners.
It also identified many investors that are beginning to develop their in-house capabilities to analyse ESG criteria.
The report can be found here.
Hong Kong is the most attractive emerging market for investors when evaluated through environmental, social and governance (ESG) indicators, research from ING Investment Management of 85 emerging marketing countries has revealed.
However, the BRIC countries – Brazil, Russia, India and China – did not make it into the top 20 emerging markets ESG league table.
Brazil was ranked 25th, China 39th, India 53rd and Russia 57th.
In addition to this, the troubled EU states of Spain, Portugal, Italy and Ireland were included in the list of emerging market countries reviewed, their respective rankings being 7th, 8th, 19th and 24th.
Uruguay, Lithuania and Latvia all scored higher on ESG scores than Italy and Ireland.
Rob Drijkoningen, head of emerging markets debt at ING IM, said: "Countries that are reasonably successful in producing a self-sustainable quality way of living for their population over generations will be more creditworthy, ensuring the capacity to generate capital to repay debt.
"Countries with a poor quality of governance, on the other hand, are more prone to crises, which can easily turn into major systemic dislocations that threaten the ability and willingness to service debt."
In other news, a group of global investors, representing more than $3trn (€2.3trn) in assets under management has welcomed guidance on the US Foreign Corrupt Practices Act (FCPA) from the US Department of Justice (DOJ) and Securities and Exchange Commission (SEC).
The guidance provides information for companies on the DOJ and SEC's policies and practices on civil and criminal prosecutions under the FCPA, the 35-year-old anti-bribery law that first set the stage for extra-territorial prosecution of overseas corruption of public officials.
Following decades during which the US led international efforts to prosecute corruption cases against US and non-US companies, the UK in 2010 passed the UK Bribery Act, thereby signalling its intention to join the US in enforcing global standards of anti-corruption compliance.
Adam Kanzer, managing director and general counsel of Domini Social Investments, the lead author of the investor statement, said: "A significant coalition of global investors has come together to make a very clear statement – bribery and corruption is bad for society, bad for business and bad for our investments.
"Our statement details the very significant risks presented by these activities, from legal consequences to impacts on economic development and the realisation of human rights."
The investor statement can be found here.
Elsewhere, in the UK, Luca Concone, chief executive at the Real Asset Energy Fund, warned that recent confusion and lack of direction from its government on renewable energies may cause the UK to slide towards the bottom of the renewable energy production capacity table in Europe.
"At the moment, wind farm capacity accounts for less than 6% of the UK's energy needs per day," he said.
"On a global scale, that means the UK, a G7 country, produces barely 3% of the world's wind energy capacity. The UK is now behind Germany, France, Italy and Spain in wind power capacity production."