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ESG Briefing, May 1: UN pension fund under fire for holdings in controversial companies

The round-up of the latest ESG developments

Environmental

The World Green Building Council has released a report which makes a business case for green building based on an analysis of 11 buildings globally with one or more green certification. The report also looks at how occupant satisfaction improves with the implementation of new health, wellbeing and productivity features. Terry Wills, CEO of the council, said: “This report should send a clear signal to companies with employees as well as building owners and managers to make green building investments a priority.”

Social

Global Communities has signed a $5m loan agreement with Calvert Impact Capital to expand lending both in Gaza and the West Bank over three years through Vitas Palestine. The collaboration between the two has been ongoing since 2007, when Calvert Impact Capital provided a $1m loan which helped grow Global Communities’ lending portfolio from $120m to $260m. According to Calvert’s Investment Director, Songbae Lee, the agreement was significant as it expanded Calvert’s traditional microfinance investing through a focus on international housebuilding.
Deutsche Bank has launched a new web tool which seeks to capture “intangible” ESG data using “Natural Language Processing (NLP)”. α-DIG reportedly sifts through “everything from tweets to regulatory filings, list of patents, conference call transcripts, and financial media news” to identify material ESG risks. Dr Andy Moniz, Chief Data Scientist for the firm’s Data Innovation Group (dbDIG), said: “α-DIG sheds light on a company’s hidden risks and opportunities through text mining of information that is otherwise difficult to analyse”.h6. Governance

The $64bn United Nations staff pension fund has nearly $1.5bn is invested in 24 publicly traded companies known for corrupt practices, human right abuses or involved in environmental crises, a Guardian investigation has revealed. The most significant position held by the fund is $210m worth of shares in Shell, it said. A 2011 UN report assigned partial responsibility for oil spills in Nigeria to the oil company, noting its failure to adhere to its own internal procedures. The fund has 203,050 beneficiaries and provides retirement, death and disability benefits to employees. Thomas Küchenmeister, Managing Director of Facing Finance said: “These investments clearly undermine the credibility of a well-respected organisation”.
Canada’s Caisse de dépôt et placement du Québec (CDPQ) has published its first annual Stewardship Investing Report “to provide a comprehensive and systematic overview of its commitments regarding ESG factors”. The C$300bn investor, which manages funds for public and semi-public pension and insurance plans, has used the document to outline “concrete measures” it has taken on topics such as climate, gender diversity, corporate governance and taxation. Last October, it make a groundbreaking commitments to step up its efforts around ESG – especially on climate and responsible leadership.
Aberdeen Standard Investment’s Head of Stewardship, Euan Sterling, railed against the “grossly excessive” pay packages for Persimmon’s top three executives at the UK housebuilder’s AGM last week. He further called concessions made in February by the Chief Executive, who voluntarily reduced his bonus from £110m to £75m, as “not even close to acceptable”. The bumper payday was accrued under the organisation’s Long Term Incentive Plan for the group’s top executives, established in 2012. The say on pay vote was passed on a 51.5% majority, with 30% of shareholders abstaining.