In an article on alrroya.com today, author Ron Robins (Founder & Analyst – Investing for the Soul) puts the spotlight on a socially responsible fund that makes stakeholder engagement their primary concern. The Australian Climate Advocacy Fund (the Fund) specifically engages companies around their climate change issues. What makes this fund unique is that they don’t employ sustainability or ESG screens.
The Fund seeks to engage and invest in all of Australia’s top 200 companies in the hopes of enhancing their climate change and ESG activities. The Fund believes that by helping these companies perform better on their climate change issues, their share value will increase and in turn increase the value of the Fund.
Not employing sustainability screens is antithetical to traditional socially responsible funds. Further, it would against their nature to invest in companies they don’t plan to own. There are some historical precedents, such as religious-affiliated funds or funds that seek to support specific causes. In the U.S. a large portion of all proxy initiatives are sponsored by religious organizations – leading these initiatives is the Interfaith Centre on Corporate Responsibility (ICCR). In 2010 ICCR members filed 282 shareholder resolutions on ESG issues.
Other successes socially responsible funds have had is in engaging companies and regulatory authorities regarding ‘say on pay’; where stockholders vote on executive compensation. Further, together with the public outcry, socically responsible funds have moved the government and the SEC to act on ‘say on pay’.
These funds are also looking to take another issue to the US Chamber of Commerce – corporate political donations. According to alrroya.com, A press release dated November 4 states, “investors today announced the filing of shareholder resolutions at several corporations that sit on the Board of the US Chamber of Commerce, challenging their corporate boards to review their policies and oversight of political expenditures, especially through trade associations. The first four companies to receive this resolution are Accenture, IBM, Pepsi and Pfizer.”
This article certainly shows great strides for socially responsible funds and investors. Do you think this is a sign of the times? Are we on the road to this being a societal norm, that SR funds will hold much weight in the regulatory environment? Discuss!
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Statement from the most senior decision-maker of the organization about relevance of sustainability to the organization and the organization’s strategy for addressing sustainability
Name of the organization
Primary brands, products, and services
Location of organization’s headquarters
Number of countries where the organization operates, and names of countries with significant operations or that are specifically relevant to the sustainability topics covered in the report
Nature of ownership and legal form
Scale of the reporting organization
Total workforce by employment type, employment contract, and region, broken down by gender
Percentage of total employees covered by collective bargaining agreements
Description of the organization’s supply chain
Significant changes during the reporting period regarding organization's size, structure, ownership, or supply chain
Whether and how the precautionary approach or principle is addressed by the organization
Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses
Memberships in associations and/or national/international advocacy organizations
Entities included in the organization consolidated financial and nonfinancial reports
Process for defining report content
Material aspects identified in the process for defining report content
For each material aspect, the aspect boundary within the organization
For each material aspect, the aspect boundary outside the organization
Explanation of the effect of and reasons for any restatements of information provided in earlier reports
Significant changes from previous reporting periods in the scope and aspect boundaries
List of stakeholder groups engaged by the organization
The basis for identification and selection of stakeholders with whom to engage
The organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns
Date of most recent previous report
Contact point for questions regarding the report or its contents
‘In accordance’ option and GRI Content Index
Policy and current practice with regard to seeking external assurance for the report
Governance structure of organization, including committees of the highest governance body
The organization’s values, principles, standards, and norms of behavior such as codes of conduct and codes of ethics
Disclosure on Management Approach for Aspect
Coverage of the organization’s defined benefit plan obligations.
Financial assistance received from government.
Significant indirect economic impacts, including the extent of impacts.
Total number and rates of new employee hires and employee turnover by age group, gender and region.
Average hours of training per year per employee, by gender and by employee category.
Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.