European Investors Slam Sustainability ‘Stragglers’

Sustainable investors are targeting companies failing to improve corporate governance and environmental responsibility.

(January 27, 2012)  —  Sweden’s largest institutional investors have slammed almost a third of the country’s leading companies for failing to address sustainability issues in their business plans.

A group of 14 investors, made up of pension funds and asset managers, said a survey answered by 82 of the largest 100 Swedish companies showed 32% of them were failing to sufficiently create and implement guidelines on sustainability.

These investors, which are responsible for 16% of the capital on the NASDAQ OMX Stockholm Exchange, said companies which excelled in the previous 2009 survey had improved, leaving the stragglers even further behind.

Nadine Viel Lamare, spokeswoman for the group, named the Sustainable Value Creation investor initiative, said: “The fact that more companies are making real headway and that these issues are being prioritised is good, but the slow pace of change among those companies that are at the bottom is of concern to us.”

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Opinion remains divided over whether sustainable investing has a positive or negative impact on returns yet an increasing number of large investors and asset managers have signed up to the United Nations Principles of Responsible Investment, an organisation that presses companies on this issue.

Elsewhere in Europe, the National Employment Savings Trust today announced it had mandated proxy advisor Manifest and the Co-operative Asset Management to provide responsible ownership services. The contract will help the pension provider to engage with the companies in which it invests and help meet its responsibilities as an “active and prudent asset owner”.

The companies responding to the Swedish survey answered questions on the environment, human rights, labour rights, business ethics/anti-corruption, working environment, and health and safety.

The survey found transparency around company guidelines on sustainability had improved and more companies were actively monitoring their suppliers on these issues.

Viel Lamare said: “We know that a lot of companies struggle with these issues and that it presents a challenge, but it’s pleasing to see things moving in the right direction.  It’s the only way we can create genuine and essential change.”

The investors behind the Sustainable Value Creation initiative are Andra AP-fonden (AP2), Church of Sweden, DNB, Fjärde AP-fonden (AP4), Folksam, Första AP-fonden (AP1), Handelsbanken Asset Management, meta asset management, Nordea, SEB, Skandia Liv, SPP, Swedbank Robur and Tredje AP-fonden (AP3).