Environment
The UK’s parliamentary Energy and Climate Change Select Committee has launched an enquiry into whether uncertainty around energy policy is undermining investor confidence. The Committee’s chair Angus MacNeil MP said: “The UK has lost its place in the top ten markets for clean energy, as investors look to more attractive markets overseas.” The inquiry is accepting written evidence until 26 October 2015.
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The Bill and Melinda Gates Foundation is the target of a new fossil fuel divestment campaign headed up by the former Seattle mayor Mike McGinn and organized by NGO 350.org. The campaign, dubbed Gates Divest, has started with a report making the case for divestment, a letter to the Foundation signed by 24 Seattle-based NGOs and a protest outside its HQ. The Foundation is also the focus of a divestment campaign by the UK’s Guardian newspaper.
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First State Super, the A$51bn (€32bn) Australian pension fund, has divested fossil fuels from its socially responsible investment option for members.
It said it would “exclude companies that source more than 20% of their operating revenues from the production, sale and distribution of fossil fuels” as well as companies that explore and or develop fossil fuel reserves, or have a substantial involvement in coal seam gas fracking.
The University of California has divested its $98.2bn (€87bn) portfolio from coal and oil sands company investments. Campaign group 350.org has welcomed the move, saying it is the largest US divestment by size to date, with the university shedding $200m in fossil fuel assets.
A group of eminent scientists and business leaders is urging governments to adopt an equivalent of the US space programme in a quest for green technology solutions. The group called the Global Apollo Programme believes global warming can be addressed without adding significant economic costs or burdening taxpayers by concerted funding to make renewable energy cheaper than coal within 10 years by investing $15bn a year in research, development and demonstration of clean energy. The group says it compares to the $100bn currently invested in defence R&D each year.
Edelman, the world’s biggest PR firm, says it has stopped working with coal producers and climate change deniers, reports the Guardian. The newspaper said Edlemann had lost a number of big clients and senior staff because of its previous stance, and was now taking a stand against spreading doubt about climate change, and the use of fake front groups to influence politicians. Link
The Australasian Centre for Corporate Responsibility (ACCR), Australian campaign group GetUp and a number of ethical financial advisers, have tabled a resolution at Australian energy company, AGL’s September 30 AGM proposing that it shifts forward to 2030 plans to phase out coal-fired power generation by 2050. The campaign is being supported by the Asset Owners Disclosure Project’s Vote Your Pension site.
Separately, the Asset Owners Disclosure Project (AODP) has issued a report, titled: Digging Deeper: An In-depth Examination Of The 2015 AODP Global Climate 500 Index
It provides detailed data on asset owner performance in the 2015 AODP ranking.
Social
An 18-month study by Barclays Wealth and Investment Management has found that only 9% of 1,800 retail investors and wealthy individuals surveyed had made impact investments, despite 56% reporting an interest in doing so. Link to report
The UK’s Social Stock Exchange has launched its first regional branch in the South West of England in collaboration with the UK government and local councils in the South West. The Social Stock Exchange hopes localised branches will tackle the London-centric nature of investment since the closure of regional stock exchanges across the UK in the 1970s.South Australian Premier Jay Weatherill has announced that the government will back a social impact bond that will raise A$9m (€5.6m) to provide housing and support from 400 homeless people. The government is currently developing a prospectus for investors.
Christian Super, First State Super, Hesta and VicSuper are contributing to Australia’s inaugural Impact Investor Survey. All the super funds have made commitments to Australia’s burgeoning impact investment space. The survey, from Impact Investing Australia, aims to provide critical insight and data. The survey will close on Friday 2 October. Link to participate in the survey.
The World Bank has called on governments to introduce reforms to encourage long-termism to support economic development in its latest Global Financial Development report. The 2015/2016 report is the third of in a series making annual recommendations on financial sector policy. Link to report
Christian Aid says a survey of FTSE100 companies on tax transparency suggests a large majority would not oppose the introduction of a legal requirement to make their country-by-country tax reports public, while some would actively support it. Link to report
Governance
New York’s $184.5bn (€163bn) Common Retirement Fund will vote in favour of a proposal to split the Chairmanship from the Chief Executive post at Bank of America (BofA) during an extraordinary shareholder meeting on September 22. The dual role is currently held by Brian Moynihan. “The Common Retirement Fund has long held that the Chair and CEO roles should be separated and is voting accordingly,” a spokesman for Thomas DiNapoli, who as New York’s Comptroller oversees the fund, told the New York Post. In opposing the measure, New York’s pension fund joins the ranks of CalPERS and CalSTRS. According to the Post, the vote on the proposal at BoA’s AGM will be very close.
The AGM of Sports Direct, the UK retailer, on September 9 saw a significant number of shareholders voting against the company’s directors. Around 11% of shareholders voted against founder and deputy chairman Mike Ashley and 23.7% voted against chairman, Keith Hellawell. Before the AGM Royal London Asset Management had publicly attacked Ashley and said it had “lost confidence in the board”. Ashley owns 55% of Sports Direct.
The UK’s Investment Association has appointed seven new directors to its board. The new board members are Maxime Carmignac from Carmignac, Michael Cohen from Capital International, Paul Feeney from Old Mutual Wealth, Alex Hoctor-Duncan from BlackRock Investment Management, Kim McFarland from Investec Asset Management, Joanna Munro from HSBC Global Asset Management and Mike O’Shea from Premier Asset Management. Four existing board members were re-elected: Andrew Formica from Henderson Group, Peter Harrison from Schroders, Andrew Laing from Aberdeen Asset Management and Mark Zinkula from Legal & General Investment Management. The board now has 18 members.
A public outcry has prompted French telecoms firms Alcatel to nearly halve the value of a “golden parachute” promised to Michel Combes, its outgoing Chief Executive. Citing a company filing, ESG firm Sustainalytics said Combes would now be given a severance package worth €7.9m. As part of the agreement, Combes must not work for the competition for 40 months. Prior to the outcry, which included an enquiry into the legality of the severance by Proxinvest, the Paris-based proxy firm, Alcatel had proposed a package worth €13.7m.
The Japan Exchange Group (JPX), which operates the Tokyo Stock Exchange and the Osaka Securities Exchange, is establishing a council of experts with the country’s Financial Services Agency to enhance corporate governance in Japan. Akira Kiyota, Group CEO of the Japan Exchange Group, said it was in response to the delisting last month of Japanese electronics firm Toshiba from the JPX-Nikkei 400 after an independent audit revealed the company had overstated its profits by JPY151.8bn (€1.1bn) since 2008.
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