ESG Updates

Australian and New Zealand

State Street trust dumps tobacco, weapons

State Street’s International Equities Trust (both hedged and unhedged) are to divest tobacco and controversial weapons as of 1 July 2020. At the end of April 2020, the trust had six tobacco securities and five controversial weapons securities, accounting for 0.88 per cent and 0.69 per cent of the index respectively. The changes are due to investor interest, governmental commitments, and investor concerns over the greater legal and other liabilities companies engaging in those industries may face.

QSuper takes socially responsible option from AMP in-house after investor demand

The management of QSuper’s socially responsible investment option is coming home, and the fund has changed the definition of pandemic illness. AMP Capital has lost the mandate because QSuper says members want more holistic management of the socially responsible investment option that targets positive impact while avoiding investments with a negative impact. Taking the option in-house means reducing investment fees and decreasing standard risk measures while maintaining returns.

Global ESG Updates

ISS ESG launches new impact rating system

The responsible investment arm of Institutional Shareholder Services Inc. (ISS) announced the launch of the ISS ESG SDG Impact Rating. The rating is available for an initial coverage universe of over 6,500 companies, which will be expanded over time. The SDG Impact Rating offers holistic metrics of impact using the United Nations (UN) Sustainable Development Goals (SDGs) as reference. The rating measures companies and how they are managing external-based negatives in their chains, while actively trying to achieve Sustainable Development Goals. Learn more.

S&P refines ESG companies, Twitter and Walmart kicked off

The S&P 500 ESG Index has completed its second annual cleanout of companies that don’t meet ESG standards. In the most recent cleanup, Twitter and Walmart were both dumped for failing to meet specific ESG standards, which happened to Facebook last year. Facebook has rejoined the Index this year, however. Wells Fargo has rejoined the Index after also being kicked off last year, despite its performance score falling, indicating its peers performed worse. Johnson & Johnson, booted off last year due to controversial products such as pelvic mesh and talcum powder, has failed to rejoin the index this year.

Companies that have never been allowed on the Index include Berkshire Hathaway, Netflix, PayPal, Phillip Morris and Lockheed Martin.