The Financial Crisis, Barack Obama, COP15...
a Pivotal Year for Responsible Investing

All eyes and ears were on Washington DC last week as Barack Obama was sworn in as the 44th President of the United States. With this new beginning the responsible investment community has an important opportunity to influence a new administration that seems quite sympathetic to the goals of sustainability and corporate social responsibility.  In fact, the US-based organisation, Social Investment Forum (www.socialinvest.org), which ASSET4 is proud to be a member of, has sent a detailed letter to the Obama administration outlining a number of key recommendations. One I would like to highlight is this, “Establish clear parameters and effective regulations for the financial system and stimulate transparent assessment of financial as well as environmental, social, and good governance factors.” Obviously, much is packed into this one sentence, but we can only hope that the new administration listens and takes action.

2009 is not just a pivotal year because of Barack Obama, but also because of the “COP15,” which stands for the United Nations Climate Change Conference being held in Copenhagen in December 2009 (www.cop15.dk/en).  It is certain to be a pivotal event for our collective future. The urgent mission of the COP15 is to define new global goals for the reduction in man-made greenhouse gases, which will be put in place once the Kyoto Protocol timeframe ends in 2012. Obviously, the stakes are very high.

We believe our data plays an important role enabling these visions. As investors search for investment grade extra-financial information on which to make their decisions within this changing and turbulent environment, the need for comprehensive, comparable, and transparent ESG data has never been greater. In this newsletter, we share three important practical examples with you. The first presents a snapshot of results from our recently introduced Sovereign Supra solution highlighting the top 10 countries in terms of ESG performance. The next story discusses the average percentage of women on corporate boards by country. Both McKinsey&Company and the Swedish pension fund, AP2, recently released reports discussing this important issue. Finally, we take a quick look at how Storebrand, a new client of ASSET4, and a leading player in the Nordic market for pensions, life and health insurance, banking and asset management is using our data.

As we move ahead in this year, we can be certain that it will not be dull. Let us hope that as we look back on 2009, we see it as a year of many important new beginnings for the financial community and responsible investing.

Peter Ohnemus ASSET4 President and CEO

Top 10 Countries in Terms of ESG Performance

Investors are looking for ways to invest responsibly in sovereign bonds. However, “black box” ratings of countries and other entities are difficult to rely on. Instead, what investors need is auditable data with access to the original sources in order to create the necessary level of transparency.  This is why ASSET4 has introduced its Sovereign Supra solution.

To give you an example of the Sovereign Supra data, we have created a graph showing the top 10 countries in terms of Environmental, Social and Strategic Governance performance. While the fact that Sweden and Switzerland show up on all three lists may not be a big surprises, some of the others might surprise you. Note that we look at over 150 KPIs when monitoring these issues including emissions, biodiversity, education, health, corruption and innovation.

At this moment the Sovereign Supra solution covers over 100 entities (including 60 countries, 21 local authorities, 8 private companies, 11 state-owned companies and 7 supranational entities). This number will grow rapidly to more than 200 by March 2009.

To view the Top 10 Countries, click here.
If you have questions regarding the results, please send them to marketing@asset4.com.

Women on the Board – an Issue for Engagement and Competitiveness

In the fourth quarter of 2008 two influential organisations came out with reports highlighting the importance of gender diversity in management.

McKinsey&Company, an international management consulting firm, in Women Matter 2, which focuses on leadership practices in corporations, stated, “Gender diversity is not just a social concern. Our new study suggest that it could also create a competitive edge to address the global challenges that corporation will face in the near future.”

While the Second Swedish National Pension Fund – AP2, in its Corporate Governance report wrote, “For the first time in ten years, the trend of a growing number of women on corporate boards has been broken . . . During the autumn, the Fund plans to initiate a dialogue with companies (nominating committees and managements) in various industries that feature the lowest proportion of women in their executive managements and on their boards.“

In order to take our own look at this issue, we used the MyIndicator functionality within our assetmasterProfessional™solution to construct a customised KPI to evaluate the average percentage of women on the board on a country basis. In reviewing the chart, the top three countries are all from Scandinavia—Norway, Sweden and Finland, with 35.6 percent and 22.9 percent and 19.9 percent respectively—with the United States coming in fourth at 13.7 percent. This information can obviously be broken down on a company level.

To see the complete chart, click here.

Storebrand Enhance its Responsible Investment Strategies

The Storebrand Group, a leading player in the Nordic market for pensions, life and health insurance, banking and asset management, recently announced that it has acquired a subscription for the ASSET4 ESG information solution. Storebrand plans to use the ASSET4 system to retrieve raw data for current research efforts, which in turn will free up resources to enable an increased level of engagement with companies in Storebrand’s investment universe.

“We are currently tracking approximately 3000 companies to ensure that our investments do not contribute to unacceptable business practices. Data gathering for our 'Best in Class' analyses takes up a significant amount of our analysts’ time,” said Christine Tørklep Meisingset, Head of Responsible Investments for Storebrand. “ASSET4’s ESG database and tools will help simplify this process and enable us to focus our resources on developing constructive dialogues with companies. ASSET4 will provide us with objective evidence regarding sustainability practices, which in turn we can use as a basis for our analyses and engagement discussions. It is important to note that Storebrand will still perform in-house analyses of companies’ corporate responsibility performance.”

To download the complete press release, click here.