Al Nassr secures 5-1 victory over Al Ain to edge closer to knockout stage    Saudi Deputy FM meets Lt. Gen. Al-Burhan of Sudan    Al-Khateeb: Saudi Arabia is the largest global investor in tourism sector "Saudi Land" pavilion inaugurated at World Travel Market in London    Saudi Crown Prince, Japanese PM discuss over phone efforts made to achieve peace in the region    Saudi Arabia, in its drive to enrich Arab culture, launches Arab Week at UNESCO in Paris    Neymar exits Al Hilal match with muscle injury, leaving fans disappointed    AlHisn Big Time Studios unveiled to transform film and TV production in Riyadh    Saudi Arabia approves cooperation agreement with US for the use of outer space for peaceful purposes    Quality of Life Program CEO highlights Saudi urban transformations at UN-Habitat conference in Cairo    Almarai wins 'Best Corporate Sukuk' at Asset Triple A Islamic Finance Awards    Top climber falls to death after rare Himalayan feat    US voters flying home in time for election    Drones and snipers on standby to protect Arizona vote-counters    India's Modi condemns violence after Canada temple incident    Elon Musk can keep giving $1m to voters, judge rules    Mitrovic's hat-trick leads Al Hilal to 3-0 victory over Esteghlal    Al Ahli extends perfect start with 5-1 victory over Al Shorta    Quincy Jones, titan of US music, dies aged 91    Hidden sugars in Asia's baby food spark concerns    HONOR unveils pre-order of the stunning HONOR MagicBook Art 14 Featuring an ultra-slim design, HONOR Eye Comfort Display and AI Cross-OS WorkStation    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Funds feel heat of coal and tar divestment drive
Published in The Saudi Gazette on 30 - 05 - 2015


Simon Jessop and Ron Bousso
For Rivka Micklewaite and fellow students, securing a pledge this week from Oxford University to avoid direct investments in companies producing coal or tar sands is just the beginning.
Getting that commitment involved a two-year campaign during which they staged a "marriage" between the 900-year-old university and "Big Oil" before breaking it up, to symbolize the need to end investment in fossil fuels, Micklewaite said.
"The campaign is definitely going to continue," she told Reuters, adding that full divestment is her aim for the 3.8 billion pounds ($6 billion) in university endowment funds.
The second-year engineering student from Balliol College is not alone. She is part of a global campaign urging investors to ditch assets in 'dirty' energy firms in favor of 'greener' rivals, and which so far has pledges to sell out totaling $50 billion.
Norway's $900 billion sovereign wealth fund and the Church of England are among recent high-profile sellers.
But some of the money managers running the more than $27 trillion in assets held globally in mutual funds say divestment as a tool to address climate change is too simplistic in most cases. Most argue it can leave fewer investors at a company who are committed to steering management in the desired direction.
"It's a much more sophisticated debate," said Sacha Sadan, director of corporate governance at Legal & General Investment Management. "Just putting (some firms) in the naughty corner and having a go at them is not going to solve the problem."
"This will be the biggest issue of the next five years ... I wouldn't say that we're 20 percent of the way there yet."
A Reuters survey of nine European fund firms managing a collective $2.7 trillion in assets revealed that most were focused on engagement with companies rather than divesting.
That approach bore fruit during recent annual general meetings, where shareholders at Royal Dutch Shell and BP demanded access to information about how each company was addressing climate change, and received company backing for their resolutions.
And in the United States, shareholders at Chevron and ExxonMobil are due to vote on May 27 on resolutions aimed at reducing greenhouse gas emissions.
Each of the fund firms surveyed acknowledged the campaign's role in raising awareness, but most said coal and tar companies were relatively easy targets, and it was more complex for other energy sources.
"What's much harder, with the integrated oil and gas companies, from a mainstream fund perspective, is what models can you develop and put in place to determine who will be impacted by the energy transition," said Matthias Beer, from the sustainable investing team at F&C Asset Management.
"That goes beyond oil and gas and mining and utilities. If you go further down the value-chain of fossil fuels, then you're talking about the automotive sector and others that are highly dependent on fossil fuels and hydrocarbons."
Oxford University joins 220 organizations, including faith groups and university endowment and public pension funds, in backing divestment ahead of a UN climate change meeting in Paris in December aimed at agreeing limits to man-made global warming.
The UN talks could add weight to the campaign if a deal ultimately means billions of dollars worth of oil, coal and gas resources remain 'stranded' in the ground.
For Jens Peers, chief investment officer for sustainable equities at Natixis Asset Management, the PR effect is key.
"Already, we're seeing pressure building. No one likes negative press," said Peers.
That in turn is pushing investors to seek advice, said Fiona Reynolds of UN-backed investor engagement group the Principles for Responsible Investment.
"This is where the divestment campaign has been successful, even if the actual amount of money that has been divested is pretty minor," Reynolds told Reuters.
But an Oxford University study in late 2013 argued the indirect impacts of divestment campaigns on companies could be wide-reaching, with those seen as worst offenders "stigmatized".
This could result in a hit to the bottom line as investors trimmed cash flow expectations and share valuations, it said.
Other potential impacts highlighted by the report include customers and other stakeholders deserting firms; politicians enacting more restrictive legislation; investors pushing for board changes and even firms being prevented by authorities from bidding for new business or having M&A deals scuttled.
"Then they will start reacting, questioning the business model — that's potentially the biggest impact the divestment and stranded asset issues can have," said Natixis AM's Peers.
The Oxford study cited the examples of a campaign to force South Africa to abandon apartheid and one to divest from tobacco firms. In the case of South Africa, for example, the US government enacted the 1986 Anti-Apartheid Act, it said, while the Bank of Boston, Chase Manhattan and Barclays were among companies to stop doing business in the country.
The funds surveyed by Reuters said leading energy companies had a crucial role to play in finding technological solutions to mitigate climate change risks, with early movers likely to be rewarded in terms of access to capital and share price gains. Simon Henry, chief financial officer at Shell, said the industry needed to work with governments and civil society on a long-term plan informed by science and economics and mindful that 80 percent of the energy industry and 100 percent of the transport sector is currently reliant on fossil fuels.
Given that, a mass exodus of long-term investors such as pension funds from holding certain stock and debt assets could end up hurting the chance of positive investor-led change.
"Fundamentally, it is a shareholder choice to buy or sell ... What this may mean is the transfer away from shareholders who might have a grown-up dialogue with us about the climate change challenge towards people who may be less bothered about that. — Reuters


Clic here to read the story from its source.