Environmental
Institutional Investors Group on Climate Change (IIGCC), representing over 130 members with €18tn in assets, has published a report – An Investable UK Emissions Reduction Plan – setting out five principles that should feature strongly in any national emissions reduction plan. The IIGCC warns that without a clear and coherent plan, the UK’s long-term decarbonisation strategy may fail to attract sufficient investment. The five principles outlined are: 1) Stability and predictability for climate-related policy; 2) Long-term vision built around stronger ambition; 3) Robust carbon pricing; 4) Specific measures and targets for three critical sectors – power generation, buildings/heating, and transport; and, 5) A shift in mind set across all levels of regional/local government.
US President Donald Trump has signed an executive order aimed at promoting the country’s oil, coal and natural gas industries, reversing much of the previous administration’s efforts to address climate change. Obama’s 2015 Clean Power Plan was designed to cut CO2 emissions from electricity by 32% by 2030.
Dutch development bank FMO has signed a ‘Letter of Intent’ with the Argentinian Government, paving the way for the development of water and wastewater infrastructure investment programmes in the country. It is hoped that the move will help Argentinian utility companies catalyse the flow of funding from the Dutch market, international capital markets, multilaterals and climate adaptation funds.
US SRI firm Zevin Asset Management has withdrawn a shareholder proposal filed with US food and beverage giant PepisCo, citing ongoing dialogue with the company. The proposal centred on the firm’s lack of quantitative targets for renewable energy sourcing and/or production, considering potential climate-related risks for the sector in coming years.
Anheuser-Busch InBev, the world’s largest brewer, has committed to transitioning to 100% renewable electricity – with an interim goal of sourcing all its purchased electricity from renewables by 2025. The pledge comes after major investors including Aegon Asset Management and Strathclyde Pension Fund expressed “their desire to invest in environmentally sustainable companies” in a letter to the company in January 2017. Engagement on this issue is part of a wider programme coordinated by UK campaign group ShareAction – with the support of 34 institutional investors representing $1tn in assets – to encourage companies to join the RE100 initiative – a coalition of 89 influential businesses committed to 100% renewable electricity.
India’s Greenko Energy Holdings has raised $155m to expand its clean energy portfolio from Singapore’s $100bn sovereign wealth fund, GIC, and the Abu Dhabi Investment Authority – contributing $123.9m and $31.1m respectively, The Economic Times has reported. GIC remains the majority shareholder following the fresh round of investment with a stake of 60-65%, while Abu Dhabi Investment Authority has around 15%.h6. Social
The New York State Common Retirement Fund has co-filed a shareholder proposal with US Marathon Petroleum – with which it holds some $78.8m in shares – requesting disclosure on “the due diligence process used to identify and address environmental and social risks, including Indigenous rights risk, in reviewing potential acquisitions” at the firm. The proposal, which Marathon unsuccessfully petitioned the US Securities and Exchange Commission to omit from its 2017 proxy statement, comes in the wake of the ongoing Dakota Access Pipeline scandal. Marathon has invested a reported $1bn in the Bakken Pipeline Project, which includes the Dakota Access Pipeline, via a joint venture with a subsidiary of Enbridge, Inc.. The proposal is co-sponsored by the Unitarian Universalist Association, the United Church Funds, the Oneida Trust of the Oneida Tribe of Indians of Wisconsin, Trillium Asset Management and As You Sow.
Walden Asset Management, the US socially responsible investment firm, has had a proposal on LBGT quashed. The proposal, which seeks explicit protections for LGBT employees at US women’s clothing retailer The CATO Corporation, was excluded from the company’s 2017 Proxy Statement. CATO sought the omission through the Securities and Exchange Commission in January, reportedly on the grounds that it was already “substantially implemented and ordinary business” – with the SEC agreeing only with the former claim. CATO said protection of LGBT employees is implicit under existing Equal Employment Opportunity Commission guidance on ‘sex’, but Walden Asset Management disagrees with the SEC’s ruling, arguing that a non-discrimination policy that explicitly includes sexual orientation and gender identity is best practice.
US Catholic-based SRI investor Ascension Investment Management, which runs $29bn on behalf of Ascension Health and other US Catholic institutions, is reported to be raising $75m for a new high-impact fund. Its first impact fund ($50m) closed in 2014.
Japanese insurer Dai-ichi Life has invested (approx. $100m) in the first ever ‘Health Bond’. Issued by the Asian Development Bank (ADB), the 10-year bond, which was arranged by Crédit Agricole, will finance the bank’s health projects in Asia and the Pacific.
Governance
Boston fund manager State Street has launched an analytical tool offering asset managers, pensions, and endowments a means to screen their investments for ESG risks.
The US City of Portland, Oregon has reportedly voted on the inclusion of a minimum environmental, social, and governance (ESG) rating restriction on its “additional direct investments in corporate securities”. The ratings will be determined by a third-party ESG research provider – with MSCI being recommended in the proposal. The City council approved a resolution in December 2016 suspending direct investments of cash assets in corporate debt securities until Council had approved the City’s Investment Policy. Details of the vote are yet to be disclosed.
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