Welcome to the EIRIS responsible investment blog. Get our perspectives on the latest trends and developments in responsible investment and corporate social responsibility.
SOCO International, the UK-based international oil and gas exploration and production company, hit the headlines two years ago due to its operations in Block V in Virunga National Park. This World Heritage Site, located in the Democratic Republic of Congo (DRC), is one of the most biologically-diverse areas on the planet.
Following intensive engagement by Aviva Investors, other investors, non government organisations and official mediation undertaken with the UK National Contact Point for breaches of the OECD Guidelines for Multinational Enterprises, the company made a commitment that it would not “undertake or commission any exploratory or other drilling within the Virunga National Park” and that it would not “conduct any operations in any other World Heritage site”. In 2015, SOCO declared that it had relinquished its licence for Block V and, following the end of its contractual obligations to the Government of the DRC, has not sought to renew its licence. Read more >
Obesity is a widely noted social risk and over the years the issue has been receiving increasing attention from investors. Companies have the power to respond to obesity risks and minimise the negative social influence of products through a range of different methods. Investors considering investing in companies with a high obesity risk should consider whether the company is appropriately responding and managing these risks. According to our research, Australian companies have been lagging behind global peers in their responses to the increasing risks associated with obesity.
Australia is a world leader when it comes to obesity levels – Australian Government statistics note that 63% of Australian adults are overweight or obese. Furthermore, one in four Australian children is overweight or obese. It is therefore critical that Australian companies do not drag their feet with regards to their response to obesity risks. Read more >
On April 7th 2016, Vigeo Eiris Rating sent a series of alerts to its clients – investors and asset managers – on 24 companies linked to the ‘Panama Papers’ affair.
These banks are listed as having created offshore companies in Panama for their clients through the law firm Mossack Fonseca.
Read more >
The recent case of Samarco’s dam that collapsed in Brazil shows that waste management is key to the mining sector in addressing significant risks. The collapse resulted in the joint owners, Vale and BHP Billiton, dealing in the aftermath with fatalities and serious injury, health risks due to water contamination, community displacement and environmental pollution, as well as serious impacts on local biodiversity. Read more >
Since the 2008 global financial crisis banks have been the subject of intense critical scrutiny, and 2015 has thus far been no different.
During the year regulators across the global financial jurisdictions have continued to hit banks with a series of eye-watering fines and financial penalties that have consistently reached beyond the billion dollar mark, covering issues including the misselling of payment protection products, trader manipulation of global currency and interest rate markets, and the breaching of anti-money laundering regulations. The likelihood is that this critical scrutiny will continue into 2016 and beyond.
It is the view of EIRIS that alongside this regulatory activity, investors will increasingly be looking to assess how effectively financing institutions are managing their environmental, social, and governance (ESG) risks, due to the potential impact this could have on their credit-worthiness. Consequently, EIRIS has developed a suite of criteria to enable investors to compare financial institutions on sector-specific ESG performance. Read more >
Compulsory superannuation in Australia means every working Australian is an investor. Australia was reported to be the fourth largest pension market in the world in 2014 with assets growing to 113% of our GDP during the year, as per the Towers Watson Global Pension Assets study. The sheer size of these investments makes us, investors, incredibly powerful. And more than ever it matters that we think about risk in a holistic way, involving both our heart and mind and making informed decisions about our investments. Read more >
The Volkswagen (VW) emissions scandal has generated an enormous amount of coverage in both the regular and financial press. This is unsurprising given the sheer magnitude of the issue with up to 11 million vehicles affected, recall costs estimated anywhere between USD 6.5bn and USD 10bn, potential regulatory fines of USD 18bn, and both the taking of class actions and the possibility of criminal proceedings against the company in the United States. The news that the company’s CEO, Martin Winterkorn, has stepped down in the last few days confirms the scale of the issue for VW and one senses there is likely to be much more fallout to come. Read more >
Latest data on SRI market developments in the German-speaking countries of Switzerland, Austria and Germany provided by the German sustainable investment forum (Forum Nachhaltige Geldanlagen – FNG) shows evidence of continuous increases in SRI volumes for the sixth year in a row. With a total market volume of EUR 197.5 bln and asset overlays for simple exclusions of cluster munitions and anti-personnel-mines affecting approximately EUR 2.5 trillion, the integration of sustainability imperatives into investment decisions stands on fertile ground for future growth.
Read more >
Social risks in consumer finance and the challenges posed by cash-lending companies were the issues in focus at the United Nations-supported Principles for Responsible Investment (PRI) panel in Melbourne, Australia on the 9th of July. The panel was attended by three analysts from CAER, an EIRIS global partner.
Read more >
EIRIS Foundation Launches Database on Investment in Crimea and Palestine
- Today, building on its 30-year history of providing free and objective information on ethical finance and corporate activity to the public, the EIRIS Foundation announced the release of a new online database of companies (BusinessInOccupiedLands.org) in Crimea and Palestine. For the first time, businesses, civil society, media and the investor community will have access to objective and comprehensive information about corporate operations in these two occupied territories.
Read more >