News | ESG
FTSE 100 falls short on workplace data Asset owners intend to increase ESG allocations beyond 25%
Blue chip companies still have some way to go to achieve best practice on reporting employment practices despite increased public scrutiny and regula- tory focus on disclosure. This was the main conclusion of Hidden Talent Part 2: Has workforce reporting by the FTSE 100 improved?, a report published by the Pension and Lifetime Sav- ings Association (PLSA) and the High Pay Centre. With £2.2trn of assets under management, pension scheme investors wield significant influence in encouraging corporate best practice. And they should wield it too. High levels of disclosure around employment practices helps cre- ate value as companies that look after their workforces tend to outperform their competitors. Across the themes of workforce composition, stability, skills and capabilities as
More than 90% of asset owners and asset managers predict that at least 25% of their funds will be allocated towards ESG within two years, a survey has discovered. However, data and technology costs remain concerns and could be barriers to wider ESG integration, BNP Paribas Securities Services has discovered. These factors came ahead of costs, a lack of advanced analytical skills and greenwashing in the list of con- cerns. Around a third of respondents said that technol- ogy costs stand out as major barrier to ESG integration, double the 16% that named it in 2017. More asset owners and asset managers are incorporat- ing ESG strategies into their offering with more than 65% of respondents aligning their investment frame- work with the UN Sustainable Development Goals (SDGs).
Other key findings uncovered by the research include there being a stronger commitment to ESG compared to 2017, where 75% of asset owners hold at least 25% of their investments in funds incorporating ESG, com- pared to 48% in 2017.
African Development Bank issues £45m social bond in Norway
well as engagement, there were some instances where workforce reporting by FTSE 100 firms had improved.
These included more reporting of aggregated turnover rate (31% in December compared to 18% in June 2017), proportion of full and part-time staff (11% com- pared to 4%) and evidence of motivation and commitment towards corporate goals, such as employee awards and schemes designed to foster teamwork (54% compared to 30%). However, there remains significant room for improvement in reporting on other key workforce issues.
The report also found that more than half (51%) of FTSE 100 companies report the gender pay gap at the director and managerial level with 52% reporting this for the whole of the workforce.
Then there is time lost to injuries. This increased to 31% in December from 26% in 18 months. Caroline Escott, the PLSA’s policy lead, investment & stewardship, said high quality workforce reporting is key to better outcomes for companies, investors and employees.
“Therefore, investors, policymakers and civil society must continue to push companies to provide better information in these areas. The PLSA supports better quality reporting from companies on workforce issues through a num- ber of initiatives,” she added.
The African Development Bank (AfDB) is to launch a three-year social bond, the first such product to be issued in Norway.
The bond has been priced at NOK500m (£45.2m) along with a five-year green bond, which raised SEK1.25bn (£103.7m).
This is the AfDB’s third social bond, but its first bond to be issued in Norwegian krona. The proceeds of the social bond will help the AfDB to finance socio-economic development in its member countries. This means poverty reduction and job crea- tion, as well as inclusive growth across age, gender and geography to improving the quality of life for the peo- ple of
Africa.This is part of the development bank’s mission to spur sustainable economic development and social progress in Africa.
SEB’s head of climate and sustainable finance, Christo- pher Flensborg, said: “It is inspiring to observe how the African Development Bank sources global capital to finance, lead and develop a strong platform for inclu- sive and environmental growth across Africa.
Issue 83 | April 2019 | portfolio institutional | 23
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