LONDON (Reuters) – Five investors have been removed from the United Nations-backed Principles for Responsible Investment, in the first such move by the group for those failing to meet its minimum requirements.
The PRI has amassed more than 3,000 signatories managing in excess of $100 trillion in assets since it was launched in 2006 and membership is increasingly seen as crucial for asset managers pitching for mandates from pension schemes.
But the PRI, whose members were told in 2018 they had two years to reach a new set of minimum requirements, said on Monday four asset managers and one asset owner would be delisted.
BPE, the private banking arm of France’s La Banque Postale, is the largest, with assets the PRI put at around $5 billion.
Stichting Gemeenschappelijk Beleggingsfonds FNV (GFB) which is part of the biggest Dutch labour union, Indonesia’s Corfina Capital, U.S.-based Primary Wave IP Investment Management and French-based Delta Alternative Management, which reported assets of between $40 million to $310 million, were also removed, the PRI said.
BPE said in a statement that, for legal reasons, it had not been able to comply with one of the six fundamental principles of the PRI, regarding discretionary management, but was “currently working on resolving this legal constraint in order to once again adhere to (the) PRI.”
A spokeswoman for GFB was “very disappointed” by the PRI’s decision.
The GFB holds a small part of the overall capital of the FNV union and the costs of meeting the new requirements exceeded the benefits, the spokeswoman said, adding that the majority of FNV’s capital is managed separately and will still be listed.
A spokesman for Delta Alternative Management declined to comment. The two other firms did not respond to requests for comment from Reuters.
The delistings follow criticism in recent years that the PRI was not doing enough to ensure members lived up to the principles, including to embed environmental, social and governance-related issues in their investment decision-making.
“We had signatories who just weren’t doing enough, and were very much there for the marketing,” PRI Chief Executive Fiona Reynolds told Reuters. “They were sort of riding on the brand and riding on what other signatories were doing.”
This first round of exclusions may not satisfy all its critics given it affects mainly small firms, while some much larger signatories are being challenged for perceived inaction when engaging with companies on climate change.
‘WAKE UP CALL’
The new standards require members to have a responsible investment policy covering at least half of all managed assets, staff responsible for implementing it and senior-level oversight.
The PRI did not say which standard the delisted firms failed.
At the start of the process, 165 PRI members were warned they did not meet the new criteria, although most improved over the course of the two years.
“I think this was a bit of a wake-up call to some people … ‘I can’t just sit here now; they’re actually upping the game and they’re taking this more seriously and I’d better get my act together’,” Reynolds said.
Of those firms originally warned, 23 chose to delist themselves for a variety of reasons, while four disputed the evidence that they had failed to meet the new requirements and successfully appealed, the PRI said, without naming them.
The PRI said it now plans to toughen membership requirements further and will launch a consultation at a meeting on Oct. 21.
Proposed changes include requiring firms’ responsible investment policies to cover 90% of assets and making that policy public. Engagement and voting would also be made mandatory for those managing equities.
(Additional reporting by Ross Kerber in Boston, Lawrence Delevingne in New York, Toby Sterling in Amsterdam and Maya Nikolaeva in Paris; Editing by Rachel Armstrong and Alexander Smith)
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
