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ESG roundup: ESG drives insurer-asset manager tie-up

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Spanish insurer MAPFRE is acquiring a 25% stake in French investment boutique La Financière Responsable (LFR) in what the organisations described as a “strategic ESG-driven partnership”.

The arrangement gives MAPFRE a stake in LFR and LFR access to MAPFRE’s global network. LFR managed funds will be offered through MAPFRE’s Luxembourg platform or directly to institutional investors.

LFR currently has €147m of assets under management.

MAPFRE’s investment in LFR was “a major endorsement” of the French boutique’s methodology for valuing stocks, according to a statement. This involves analysing more than 120 environmental, social or governance (ESG) indicators for 160 Eurozone companies using information provided directly by the companies, as opposed to secondary research.  

MAPFRE chief investment officer José Luis Jiménez said: “The new relationship offers MAPFRE Group and our asset management company, MAPFRE AM, a real opportunity to play a part in the CSR debate.”

Companies getting more serious about water

Company boards are beginning to take water security more seriously, according to new research.

In 2017, 520 companies (70%) that responded to questions about freshwater resources from CDP, an environmental data and campaign group, had board-level oversight of water issues. The organisation said water security now had “a firm seat at the table” at these companies’ boards.  

However, only a small group of 53 companies (7%) were putting an internal price on water that accounted for its social and environmental costs and benefits, according to CDP’s report. Slightly more – 16% – saw higher water prices as a potential risk. 

CDP reported that 418 companies (56%) had set water targets or goals, although the majority were still short-term in nature and did not “adequately account for the sustainable thresholds of the basins upon which companies rely”.

Overall, three times as many companies (73) made the organisation’s “A-list” for global water management in 2017 compared to last year. 

CDP launched its concept of water disclosure in 2009. At the time it had 137 investors signed up to its request for water-related information, and 175 companies responding. This year CDP asked 4,653 of the largest global companies to provide data and 2,025 companies responded, up from 1,432 last year. Its research report presented an analysis of this year’s water response data from a sample of 742 of the world’s largest publicly-listed companies. 

More investors have signed on to CDP’s programme, too. Today CDP acts on behalf of 639 institutional investors, representing $69trn (€60trn) in assets.

Norges Bank Investment Management, which manages the assets of the Norwegian sovereign wealth fund, said it was pleased to see CDP reaching significantly more companies regarding water disclosure. 

”Observing the steady increase in the number of reporting companies, we are now hoping to see more firms disclose targets and metrics addressing water management, rendering disclosure more meaningful for us as shareholders,” it said.

Diesel bans: a tough sell

Bans on diesel cars in various countries and cities could prevent car manufacturers from meeting emissions targets and avoid fines, according to analysis by MSCI. 

Most carmakers rely on fuel-efficient diesel fleets to meet strict emissions standards in the EU, according to Arne Philipp Klug, an analyst at MSCI.

He said all carmakers apart from Toyota were at risk of missing regulatory targets for fleet emissions in 2021 and that declining vehicle sales could increase the risk of fines. 

Diesel is dominant in German carmarkers’ fleets, accordin to Klug, but Volkwagen would not be affected much compared with Daimler and BMW. This was because there was a “marginal gap between the fuel efficiency of VW’s petrol and diesel fleets”, according to Klug.

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