CSR management

We all know climate change has been a headline issue for a number of years. Despite this, it is fair to say that a climate change strategy – no doubt to the exasperation of many a sustainability manager - has been viewed by and large as a ‘nice to have’ by senior executives, rather than a fundamental part of core business that has a significant impact on the bottom line. But there are strong signs to suggest that things are changing, not least because investors are viewing climate change as an increasingly important investment issue.

The FairPensions’ research reveals that major investors are starting to give serious consideration to the affect of climate change when making investment decisions. Not only are investors looking at the physical risks due to climate change, but also the potential financial risks and opportunities from regulation. As these risks increase and become more imminent (the UK CRC and likely climate change legislation in the US are examples), investor interest will increase and climate risk will become increasingly important when determining share value. The strong appetite for climate change regulation amongst investors is therefore of no surprise, especially given the current inconsistency on disclosure.

It now seems madness for any company, even in a lower risk sector, to put their head in the sand and hope climate change will go away. Like it or not, climate change is going to be a fundamental part of business. It is important companies begin taking action now before investors start abandoning ship. But rather than viewing climate change as a risk, companies should consider it an opportunity - a chance to differentiate and build brand equity in an ever more environmentally conscious world. By taking such proactive action in response to the US Chamber of Commerce’s stance on climate change, companies such as Nike and Apple are already seizing the opportunity and stealing a march on competitors.

Chad is a consultant at Corporate Citizenship. Email him at chad.rogerson@corporate-citizenship.com to discuss assurance, community, Impacts, new business, stakeholder engagement and strategy development.

Responsible investment portfolios performing the same or better than other investments
The report ‘Responsible Investment and Wealth Management: Opportunities for the future’ produced by EIRIS was released on October 12. The research, based on a survey of WealthBriefing readers found that 90% of wealth managers say responsible investment portfolios have performed the same or better than other investments, and that there is an increasing awareness of environmental, social and governance issues amongst high net worth individuals. EIRIS also found that the economic downturn has had a positive effect on the view that wealth managers take towards responsible investment. 55% of wealth managers stated they were more likely to consider governance and impending regulatory issues. Wealth managers also identified a lack of clarity and information on performance as a key barrier to implementing bespoke responsible investment solutions for clients.
Contact: EIRIS
www.eiris.org

Two thirds of charity advisors now asking the ethical question
The latest research from the EIRIS Foundation Charity Project and the Charity Finance Directors Group, released on October 1, has found that 87% of UK charities who have an ethical investment policy stated that their financial advisor has discussed including ethical issues within their investments. However, for those charities that did not have an ethical investment policy, only 43% of charities said their advisor had asked them about ethical investment. The report ‘Are charity consultants helping or hindering the development of SRI’ investigates charity advisors’ current stance on socially responsible investment (SRI), how they view their role in the evolving SRI market and what would increase the uptake of SRI by charity investors. The report recommends that advisors could do more to raise SRI issues with all charities and include environmental, social and governance (ESG) issues in standard reviews of investment managers. A separate report by the investment firm CCLA revealed that foundations are becoming more receptive to social investment because they expect the Charity Commission to support it in new guidelines that will be issued in January 2010.
Contact: EIRIS
www.eiris.org
CCLA
www.ccla.co.uk

Making the corporation ‘climate change ready’: investors call for action
FairPensions released research on October 12 that analysed how major investors see companies’ climate change risks and opportunities and found that the majority view it as an important investment issue and are now making investment decisions in response. The research, conducted over the summer also found that there are wide variations in investors’ approach to climate change and a strong interest in climate change regulation. The analysis looked at responses from 39 fund management companies operating in the UK. 89% of respondents stated they considered climate change to be an “important” or “very important” investment issue and 86% stated it had affected their investment allocations. However, only relatively low levels of fund managers reported on climate change risks and opportunities, with 59% either not reporting at all or only on clients request.
Contact:FairPensions
www.fairpensions.org.uk

Shareholders urge 14 companies to challenge US Chamber of Commerce on climate change
In letters to 14 organisations on October 16, 43 investors and investment organisations that represent more than $16 billion in assets under management urged companies to stop the contradiction between their own policies and the US Chamber of Commerce’s and National Association of Manufacturers’ (NAM) positions on pending US climate change legislation. Each of the organisation’s involved has publicly stated that it supports action on climate change which both the Chamber and NAM are against. The letters were organized by Green Century Asset Management and Walden Asset Management who asked the organisations to address their opposing position to the Chamber by withdrawing their membership, publicly disclosing their disagreement or asking the associations to refund the amount of their frees used to lobby on the issue. Companies including Apple, Nike, PG&E and Duke Energy have recently resigned for either the Chamber or NAM over their opposition to climate change legislation.
Contact: Green Century Asset Management
www.greencentury.com

Triodos Bank maps out its investments online
Triodos launched a new tool with enables customers to pin-point every organisation the bank finances in the UK and Ireland, allowing them to see exactly how Triodos lends its money. The microsite ‘Know where you money goes’ was launched on October 3, and allows Triodos to demonstrate how its approach differs from many other banks operations. The company believes that the tool represents a new benchmark for transparency in banking and should be something that the industry as a whole should aspire to. Triodos Bank only finances enterprises that create social, environmental or culture added value. Its clients cover a variety of sectors including organic food and farming, renewable energy, social housing and fairtrade. Transparency is a key value and customers are informed about the bank’s lending procedures and are able to target their savings to particular areas of investment.
Contact: Triodos
www.triodos.co.uk

SAM, Dow Jones Indexes and KPC launch Dow Jones Sustainability Korea indexes
SAM, the investment boutique focused exclusively on sustainability investing, together with Dow Jones Indexes, a leading global index provider and the Korea Productivity Center (KPC), the agency tasked to increase productivity within the Korean industry, launched two dedicated sustainability indexes for Korea on October 20. The Dow Jones Sustainability Korea Index (DJSI Korea) is designed to track the sustainability leaders among South Korea’s 200 largest companies by free-float market capitalization. The current composition includes a total of 41 sustainability leaders.
Contact: Dow Jones Indexes
press.djindexes.com