London, United Kingdom

(London, 15 March 2012) – A coalition of global investors from 12 countries managing over US$3 trillion of assets today added its voice to increasing calls for better corporate reporting on environmental, social and corporate governance (ESG) activities.

The coalition of investors, all signatories to the UN-backed Principles for Responsible Investment, is writing to 118 UN Global Compact companies with a combined market cap of an estimated US$2.59 trillion, to either:

• welcome advanced-level reporting, or, conversely,
• challenge non-communicating companies to regain full participant status.

This is the fifth year that investors have engaged with Global Compact participant companies on the issue of transparency. Each of the 29 laggard companies, with a combined market cap of an estimated US$136.9 billion, are participants of the Global Compact, but have failed to produce the mandatory annual report that communicates their progress on corporate sustainability. The Global Compact recently announced that it has expelled 3,123 companies since 2005 for failure to communicate progress on their efforts to implement its ten sustainability principles.

From 2008 through 2011, the engagement resulted in an average 40.1 percent of laggard companies subsequently submitting their sustainability reports; this has included firms such as BHP Billiton, Aker Solutions, Severn Trent, Merck Kga, Oriflame Cosmetics, The Gap and LVMH. The status of all companies included in last year’s engagement can be found here.

In addition to writing to laggard companies, the investor coalition has acknowledged 89 leader companies with a combined market cap of an estimated US$2.45 trillion who have been identified as advanced-level reporters.  These leaders include Novo Nordisk, Enel, Daimler, Nestle, Telefonica and Siemens. A full list of this year’s leaders can be viewed here.

Steve Waygood, Head of Sustainability, Research and Engagement at Aviva Investors, one of the investors involved in the coalition, said:
"Aviva Investors is proud to work in collaboration with other like-minded institutional investors, all of whom understand that good management of corporate performance on ESG issues can be material to corporate earnings. Since we first proposed this initiative over five years ago it has gone from strength to strength, successfully encouraging some 40.1% of companies over the past five years to make good on their reporting commitments to the UN Global Compact. This bodes well for the discussions at the forthcoming UN Rio+20 conference in June, where corporate reporting on sustainability performance is appropriately high on the agenda of the 193 Member States that will be assembled."

James Gifford, Executive Director of the PRI added,
“After the global financial crisis many investors believe that improved corporate disclosure of ESG issues leads to better risk management, good governance and enhanced transparency, all of which are necessary to protect long-term returns. Companies that would attract investors need to recognise this if they want to attract capital.”

Gavin Power, Deputy Director of the UN Global Compact added,
"Corporate sustainability implementation and disclosure both lie at the heart of the UN Global Compact. We therefore continue to applaud this initiative by global investors, now in its fifth year. At the upcoming Rio+20 Summit, there will be an opportunity for governments and public policy makers to fully take stock of the rapidly evolving trends in business sustainability and responsible investment -- with an eye towards creating new incentives to drive higher levels of sustainability performance and disclosure. We encourage investors to actively participate in the Rio+20 process, and welcome their contributions".

The PRI and Global Compact initiatives are engaged in a number of mutually reinforcing activities, including an investor engagement urging companies around the world to sign onto the UN Global Compact. As of November 2011, this engagement saw 211 of the targeted companies join the Global Compact.

Contact

Danielle Chesebrough
Danielle.Chesebrough@unpri.org

A number of the investors participating in this engagement are listed below:

Amundi Asset Management
First Swedish National Pension Fund (AP1)
Second Swedish National Pension Fund (AP2)
Third Swedish National Pension Fund (AP3)
ASN Bank
Aviva Investors
Boston Common Asset Management
Canada Pension Plan Investment Board
Cyrte Investments
Dexia Asset Management
DNB
Folketrygdfondet (Government Pension Fund Norway)
Keva
KLP
Mn Services N.V.
New Zealand Superannuation Fund
Newton Investment Management
Nordea
Northern Ireland Local Government Officers' Superannuation Committee
OPSEU Pension Trust (OPTrust)
Pensions Caixa 30 FP
PGGM Investments
Santa Fé Portfolios Ltda
SNS Asset Management
StatewideSuper
Syntrus Achmea Asset Management
The Central Church Fund of Finland
The Church of England National Investing Bodies
Trillium Asset Management
Wespath Investment Management

Principles for Responsible Investment (PRI) The Principles for Responsible Investment, convened by UNEP FI and the UN Global Compact, was established as a framework to help investors achieve better long-term investment returns and sustainable markets through better analysis of environmental, social and governance issues in the investment process and the exercising of responsible ownership practices. The Principles themselves, a full list of signatories and more information can be found at www.unpri.org

United Nations Environment Programme Finance Initiative (UNEP FI) UNEP FI is a unique public-private partnership between UNEP and the global financial sector. UNEP works with over 170 banks, insurers and investment firms, and a range of partner organisations, to develop and promote linkages between sustainability and financial performance. Through its comprehensive work programme encompassing research, training, events and regional activities, UNEP FI carries out its mission to identify, promote and realise the adoption of best environmental and sustainability practice at all levels of financial institution operations. More information: www.unepfi.org

United Nations Global Compact Launched in 2000, the UN Global Compact brings business together with UN agencies, labour, civil society and governments to advance ten universal principles in the areas of human rights, labour, environment and anti-corruption. Through the power of collective action, the Global Compact seeks to mainstream these ten principles in business activities around the world and to catalyze actions in support of broader UN goals. With nearly 7,000 participating businesses from 150 countries, it is the world's largest voluntary corporate sustainability initiative. More at: http://www.unglobalcompact.org.