(Updated) New Hong Kong Watch report finds that MSCI investors are at risk of passively funding crimes against humanity in Xinjiang

Link: https://www.hongkongwatch.org/all-posts/2022/12/5/updated-new-hkw-report-finds-that-msci-investors-are-at-risk-of-passively-funding-crimes-against-humanity-in-xinjiang

Report PDF: https://static1.squarespace.com/static/58ecfa82e3df284d3a13dd41/t/638e318e6697c029da8e5c38/1670263209080/EDITED+REPORT+5+DEC.pdf

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A new report by Hong Kong Watch have found that a number of pension funds may be passively invested in at least 13 China based companies where there is credible evidence of involvement in Uyghur forced labour programs and construction of internment camps in Xinjiang.

 As part of the report, Hong Kong Watch found that major asset managers are exposed passively to these companies as a result of their inclusion on Morgan Stanley Capital International’s Emerging Markets Index, China Index and All World Index ex-USA.  

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Commenting on the release of the report, Johnny Pattersonco-founder and a research fellow at Hong Kong Watch, said:

“13 companies on MSCI’s emerging markets index are either known to have directly used forced labour through China’s forcible transfer of Uyghurs, or been involved in the construction of camps. Given this Index is the most widely tracked Emerging Markets index in the world, it raises serious questions about how seriously international financial institutions take their international human rights obligations or the ‘S’ in ESG.

Our view is that firms known to use modern slavery or known to be complicit in crimes against humanity should be classed alongside tobacco as ‘sin stocks’, or stocks which investors do not touch. Governments have a duty to signal which firms are unacceptable, but international financial institutions must also be doing their full due diligence. It is unacceptable that enormous amounts of the money of ordinary pensioners and retail investors is being passively channelled into firms that are known to use forced labour.” 

Publication Date: 5 Dec 2022

Publication Site: Hong Kong Watch

Hong Kong Watch gives evidence to the Canada-China Relationship Committee on ESG investment & country risk analysis

Link: https://www.hongkongwatch.org/all-posts/2022/12/1/hong-kong-watch-gives-evidence-to-the-canada-china-relationship-committee-on-esg-investment-amp-country-risk-analysis

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On Tuesday, Hong Kong Watch’s co-founder and trustee, Aileen Calverley, and Director of Policy and Advocacy, Sam Goodman, gave evidence to the Special Committee on the Canada–People’s Republic of China Relationship on the exposure of Canadian pension funds to Chinese stocks and bonds.

Hong Kong Watch has previously written extensively on the question of ESG, business, human rights, and Canadian pension funds exposure to Chinese companies linked to gross human rights violations, including the internment camps in Xinjiang.

In his remarks, Sam Goodman, discussed why China should be considered an ESG investment risk, recommending that:

  • Lawmakers consider sensible regulations to define ESG, label China as an ESG risk, and introduce a blacklist like the USA to restrict investment in Chinese firms with questionable human rights, environmental, and governance credentials.

In her remarks, Aileen Calverley discussed the risk of pension fund investments in China in the event of sanctions, recommending that the Government:

  • Include a China Country Risk Analysis in the Indo-Pacific Strategy.
  • Encourage publicly controlled pension funds to avoid exposure in China.

The full committee hearing can be watched here.

Publication Date: 1 Dec 2022

Publication Site: Hong Kong Watch

Inflation Around the World: How Does the US Compare to Canada and the EU?

Link: https://mishtalk.com/economics/inflation-around-the-world-how-does-the-us-compare-to-canada-and-the-eu

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  • Inflation in the US was the first to peak.
  • US inflation peaked in June at 9.06 percent and is currently (through September) at  8.20 percent.
  • Inflation in France peaked at the lowest rate, 6.08 percent.
  • France also has the lowest current rate of 5.55 percent.  
  • Inflation in Germany is 9.99 percent and still rising
  • Inflation in Italy is 8.87 percent and still rising
  • Inflation in Spain was the highest peak so far at 10.77 percent
  • Inflation in the UK is 8.80 percent matching the July high.
  • Inflation in Canada peaked at 8.13 percent and is now 6.86 percent

Author(s): Mike Shedlock

Publication Date: 3 Dec 2022

Publication Site: Mish Talk

Ontario Teachers Pension Could Lose $95 Million on FTX Investment

Link: https://www.ai-cio.com/news/ontario-teachers-pension-could-lose-95-million-on-ftx-investment/

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Canada’s Ontario Teachers Pension Plan could lose as much as $95 million that it had invested in now bankrupt cryptocurrency exchange FTX.

In October of last year, the C$242.5 billion ($182.9 billion) pension fund announced that it had participated along with 68 other investors in a $420 million funding round for FTX Trading Ltd., which is the owner and operator of FTX.COM. The investment was made through OTPP’s C$8.2 billion Teachers’ Venture Growth platform.

The pension fund says TVG, which was established in 2019 to invest in emerging technology companies raising late-stage venture and growth capital, seeks out innovative companies “that are using technology to shape a better future.”

Although the pension fund didn’t say how much of the $420 million it accounted for at the time of the announcement, it recently disclosed that it invested a total of $75 million during that round of funding in both FTX International and its U.S. entity FTX.US. It also revealed that it made a follow-on investment of $20 million in FTX .US three months later in January.

Author(s): Michael Katz

Publication Date: 11 Nov 2022

Publication Site: ai-CIO

Canadian Pension Giant Makes Its First Foray Into Colombian Private Equity

Link: https://www.ai-cio.com/news/canadian-pension-giant-makes-its-first-foray-into-colombian-private-equity/

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The C$539 billion ($431.7 billion) Canada Pension Plan Investment Board has invested $334 million to acquire a 19.3% stake in Colombia-based discount grocery store chain D1, formerly known as Koba Colombia. The deal marks the pension giant’s first direct private equity investment in the country.

D1, which first opened for business in 2009 and officially took on its new name last month, recently announced it has become Colombia’s main food retailer. Citing findings from Nielsen, the company said it had a 9.7% share in the retail market and a 74% share in the so-called “hard discount” sector at the end of 2021. D1 has over 2,000 stores and reported 2021 operating income of more than $10.9 billion, which was a 32% increase from 2020. It also said this year.

Author(s): Michael Katz

Publication Date: 14 July 2022

Publication Site: ai-CIO

Faulty Regulation Blamed for Pension Plans Cutting Investment in Canada

Link: https://www.theepochtimes.com/faulty-regulation-blamed-for-pension-plans-cutting-investment-in-canada_4474326.html

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Canada’s government acknowledges that the significant investments they seek in Canadian businesses and infrastructure must come mostly from the private sector. But in fact for decades, the country’s pension funds have been considerably reducing their domestic investments, a trend the feds and regulation are being taken to task for.

Tony Loffreda, independent senator from Quebec and former vice chairman of RBC Wealth Management, on May 12 asked the government’s representative in the Senate, Marc Gold, what the feds could do to incentivize Canada’s pension funds to invest more in Canada “without necessarily regulating free enterprise.”

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The CPPIB’s 2021 annual report showed that in 2006, 64 percent of its assets were invested in Canada and the remaining 36 percent invested globally. But by 2021, the mix had changed to 15.7 percent in Canada and 84.3 percent globally.

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The report outlined some of the reasons for the trend, singling out regulation.

“Plan sponsors are reacting in very predictable ways to their regulatory environment and the only way to change this behaviour is to change the environment,” LetkoBrosseau said.

It said regulation has over-emphasized short-term fluctuations in asset values, resulting in a shorter investment time horizon for pension fund assets. In contrast, pension savings, which represent 30 percent of Canadian savings, are typically invested for the long term and are meant to be managed such that they can take more risk to earn greater rewards.

Author(s): Rahul Vaidyanath

Publication Date: 18 May 2022

Publication Site: The Epoch Times

Report: Thousands of Canadians Died Due to Delayed Care during COVID-19

Link: https://fee.org/articles/report-thousands-of-canadians-died-due-to-delayed-care-during-covid-19/

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A new report commissioned by the Canadian Medical Association (CMA) looks at the broader health impacts of COVID-19 in Canada. The November report, called A Struggling System, explores a range of growing problems, from mental health issues to substance abuse and deteriorating social determinants of health. Sadly, the report also confirms a fact that many have suspected since the beginning: that delays in care have led to thousands of preventable deaths.

“Although it is not surprising that more Canadians died in 2020 than in a typical year,” the authors write, “the number of excess deaths was greater than can be explained by COVID-19 alone. While there may be several drivers of these excess deaths, delayed or missed care due to shutdowns of services and lack of sufficient capacity in overburdened health systems may be a contributing factor.”

After analyzing the data, the authors estimated that delayed and missed health care contributed to more than 4,000 excess deaths not related to COVID-19 between August and December 2020. Needless to say, the total number of preventable deaths over the pandemic to date is likely much higher.

Author(s): Patrick Carroll

Publication Date: 8 Dec 2021

Publication Site: FEE

Severe hepatitis of ‘unknown origin’ in children being investigated in Canada

Link: https://www.cbc.ca/news/health/liver-disease-mystery-1.6431872

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Public health officials say they’re investigating cases of severe liver disease “of unknown origin” among children in Canada as global scientists race to understand a mysterious hepatitis outbreak that has affected nearly 200 youths around the world.

“The Public Health Agency of Canada is aware of reports of severe acute hepatitis of unknown origin in young children in Canada,” the department said in a statement on Tuesday, in response to questions from CBC News.

“These are being investigated further to determine if they are related to cases in the United Kingdom and the United States. As the investigation evolves, we will keep the public updated accordingly.”

The latest available data from the World Health Organization (WHO) shows at least 169 cases of acute hepatitis of unknown origin have been reported in close to a dozen countries, with the bulk of the reports — 114 — from the U.K. 

Author(s): Lauren Pelley

Publication Date: 26 April 2022

Publication Site: CBC

Why has America’s vaccination programme slowed so much?

Link: https://www.economist.com/graphic-detail/2021/07/08/why-has-americas-vaccination-programme-slowed-so-much?utm_campaign=the-economist-today&utm_medium=newsletter&utm_source=salesforce-marketing-cloud&utm_term=2021-07-08&utm_content=article-link-6&etear=nl_today_6

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ON JULY 4TH President Joe Biden stood on the White House lawn to declare that America was nearing independence from the coronavirus. But with covid-19 not fully “vanquished”, he called upon his fellow citizens to get vaccinated, telling them that “it’s the most patriotic thing you can do.” About 55% of Americans over the age of 12 have now been fully vaccinated, and a further 10% have had the first of two doses. But in recent weeks America’s vaccination rate has slowed markedly. In April 3m doses were administered each day; since June that figure has fallen to an average of 1m per day.

There are three possible explanations for this slow-down. The first is that it is typical for vaccination rates to fall as more people are jabbed, since those in cities and other easy-to-reach areas are likely to have been targeted already. Yet America does not appear to have reached such a threshold. Other rich countries, such as sparsely populated Canada, continued to vaccinate at a decent clip until about 75% of their populations had received their first dose (see left-hand chart). Germany, which has vaccinated a similar proportion of its citizens as America, is currently vaccinating at nearly three times the rate.

Publication Date: 8 July 2021

Publication Site: The Economist

UPDATE 2-Canada Pension Plan Investment Board eyes assets in shift to clean energy

Link: https://www.reuters.com/article/cppib-results/update-2-canada-pension-plan-investment-board-eyes-assets-in-shift-to-clean-energy-idUSL2N2N70WU

Excerpt:

The Canada Pension Plan Investment Board (CPPIB) is hunting for investments in the world’s transition to renewable energy as it aspires to be a global leader in sustainability, the head of the company told Reuters on Thursday.

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The pension manager last month announced it was creating a new investment group that would generate investment opportunities in renewables, conventional energy and new technology and service solutions.

CPPIB’s exposure to renewable energy producers rose to C$7.7 billion at March 31 2021, from C$6.6 billion at March 31, 2020, according to a spokesman for the firm.

Author(s): Maiya Keidan

Publication Date: 20 May 2021

Publication Site: Reuters

New York pension fund divests $7 million from Canadian oil sands firms

Link: https://www.reuters.com/article/us-new-york-pension-oil-sands/new-york-pension-fund-divests-7-million-from-canadian-oil-sands-firms-idUSKBN2BZ1UT?il=0

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New York’s state pension fund is restricting investment in six Canadian oil sands companies because they have not shown they are prepared for a transition to a low-carbon future, the fund’s Comptroller Thomas DiNapoli said on Monday.

The New York State Common Retirement Fund will divest more than $7 million in securities already held in the companies, and not make any further investments in them, DiNapoli said in a statement.

Canada’s oil sands hold the world’s third-largest crude reserves and have some of the highest emissions intensity per barrel, due to the carbon-intensive production process of extracting tar-like bitumen from the ground.

Author(s): Nia Williams

Publication Date: 12 April 2021

Publication Site: Reuters

Funded Levels of Canadian DB Plans Climb to 20-Year High

Link: https://www.ai-cio.com/news/funded-levels-canadian-db-plans-climb-20-year-high/

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Thanks to surging bond prices, Canadian defined benefit (DB) pension plans ended the first quarter of this year at their highest funded levels in more than 20 years, according to Mercer. However, the asset manager and consulting firm warns that the lofty funded positions might not last, depending on the trajectory of interest rates, inflation expectations, and equity market performance.

Mercer’s Pension Health Index, which tracks the solvency ratio of a hypothetical DB pension plan, increased to 124% at the end of March from 114% at the end of 2020. That is the index’s highest level since it was launched in 1999. Meanwhile, the median solvency ratio of the pension plans of Mercer clients was 104% as of the end of March, up from 96% at the end of December.

Long bond yields jumped 77 basis points (bps) during the quarter to lower the plans’ liabilities and more than offset the negative returns reported by many pension funds during the period.

Author(s): Michael Katz

Publication Date: 12 April 2021

Publication Site: ai-CIO