Institutional investors may have a fiduciary duty to consider environmental, social, and governance (ESG) factors, according to a new study from the United Nations Environment Programme Finance Initiative (UNEP FI). In reporting on “Fiduciary Responsibility,” Social Funds’ Robert Kropp expressed the uncertainty that still surrounds the question of ESG-related fiduciary responsibilities:

“The report argues that consultants may well have a legal duty to proactively raise ESG issues with their clients. The report also recommends that ESG issues be embedded into legal contracts between asset owners and asset managers.”

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As the Senate deliberates over the House’s Waxman-Markey cap-and-trade bill, Politico has presented a debate on the bill’s potential impact on the US economy. Mindy S. Lubber, of the environmental coalition Ceres, argues that Waxman-Markey “deserves our support.” In response, William L. Kovacs of the US Chamber of Commerce tells why he believes the economy will be harmed by the bill’s provisions.

Their discussion is a useful summary of pro- and anti-Waxman-Markey arguments. It also shows that a productive public policy debate depends on data. While both sides marshal projections and estimates to make their case, neither can present hard numbers on the cost of carbon emissions by American business. Many companies disclose some data, but without standardized, economy-wide reporting, no one can know the real costs or benefits of a cap-and-trade scheme.

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As the Obama Administration seeks to overhaul financial regulation, a multi-trillion-dollar coalition of investors has argued that the government should require corporate disclosure of climate change-related risks. Climate Risk Disclosure in SEC Filings – a deceptively modest title – calls for replacing the current hodgepodge of voluntary disclosure with a federally mandated reporting regime.

Ceres, the Environmental Defense Fund, and other sponsors of this Corporate Library-produced study formally presented their findings to the Securities and Exchange Commission (SEC) in a June 12 letter.

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The Madoff Madness and the Banking Crisis: At one extreme, trustees must dodge sociopathic fraudsters; on the other, they must avoid the hubris of “the smartest guys in the room.”

Modern Portfolio Theory and the legal thinking it’s influenced address the problem by means of risk analysis and diversification. This approach has limits, as Investments & Pensions Europe reported recently: “Dutch pension funds have lost €166m to the Ponzi scheme run by Bernard Madoff, Wouter Bos, the Dutch finance minister has claimed.”

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Only 24% of voters know that “cap and trade” describes an environmental policy proposal, according to a new Rasmussen poll. Matthew Yglesias at ThinkProgress cited the results this week, and also noted that 46% of respondents guessed that cap and trade involves Wall Street regulation or health care.

The KLD Blog is not typically concerned with opinion polls, but this survey hits close to home. As stated on our “About” page, “KLD analysts stay apprised of economic, financial and political developments worldwide, and the KLD Blog shares our expertise with you.”

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The British journal Responsible Investor has published an interview with Gro Nystuen, chair of the Norwegian state investment fund’s Council of Ethics. Norway’s government is a leading advocate and practitioner of sustainable/socially responsible investing (SRI).

Ms. Nystuen speaks frankly about how the Norwegian state pension fund puts its good intentions into practice. “The Council consists of five persons who are all experts in the different areas covered by our guidelines,” she says. “This expertise means that we know what we are talking about. It is not a ‘prominent-persons-have-been-politicians’ kind of council, as it could easily have been.”

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Carbon Counts USA, a new report from research firm (and KLD partner) Trucost, studies the “carbon intensity” of 91 major mutual funds. Trucost found wide variation in funds’ carbon footprint, as the highest-carbon fund they studied was 38 times as carbon-intensive as the best performer.

Perhaps due to the Obama Administration’s stated commitment to a national carbon emissions market, Carbon Counts USA (available here) has attracted attention from the business press. Dow Jones’ Daisy Maxey writes that major fund managers are “responding cautiously” to the implication that they should consider companies’ carbon footprints:

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The Social Investment Forum has posted a list of thoughtful answers to the “Top 10 Questions about SRI.” I especially like SIF’s responses to some skeptical questions about our industry, such as:

Is the performance of SRI funds competitive with mainstream funds and with their benchmarks?

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