RI ESG Briefing, April 1: Barrick Gold announces new pay scheme after shareholder engagement

Environmental

Danish pension funds PKA and PBU as well as IFU, an asset manager owned by the Danish state, are among the investors in a Chinese plant that will produce catalysts to purify diesel engine emissions. Total investment in the plant, which will be located 100km east of Beijing, was put at DKK900m (€120.5m). The Danish institutions are contributing DKK140m. “Anyone who has seen pictures of the heavy smog in Beijing knows China has some serious climate problems. With this investment, we can not only help the Chinese, but the climate in general,” said PKA Investment Director Michael Nelleman Pedersen.

The Institutional Investors Group on Climate Change (IIGCC), whose members hold €7.5trn in assets, has urged governments to spur investment in low-carbon technologies following a worrying new report from the Intergovernmental Panel on Climate Change (IPCC). “The IPCC report shows that the impacts of climate change are widespread and will become more serve without determined action,” said Stephanie Pfeifer, chief executive of the IIGC. Investors needed reassurance that governments were committed to a low-carbon future so that they can finance complex, long-term energy projects.

The Green Investment Bank (GIB) of the UK has invested £461m (€555m) to become part owner of two UK offshore wind farms. GIB said it and a Japanese company had paid Danish energy giant DONG £500m for a 50% stake in the Westermost Rough offshore wind park. GIB’s share of the purchase price was £241m. GIB also said it had paid Germany’s RWE Innogy £220m to acquire a 10% stake in Gwynt y Môr, which is currently Europe’s largest wind park under construction. Announcement

Social

Big Society Capital, the UK social investment vehicle, will invest £14.5m in Charity Bank, providing it with greater capacity to lend, according to a report in the Financial Times. The FT said Charity Bank would use the fresh capital to increase its annual lending from £55m last year to £250m by the end of 2018. All told, Charity Bank has made £185m in loans to charitable organisations since its start 12 years ago. Big Society Capital, meanwhile, was launched in 2012 with £200m in seed money from four UK banks.

A group of investors with a total of £195bn in assets under management are backing proposed inclusion of proportionate supply chains reporting requirements in the Modern Slavery Bill that is currently going through the UK Parliament. They include: Rathbone Investment Management, F&C, Ecclesiastical, CCLA, the Church Commissioners, the Joseph Rowntree Charitable Trust and Barrow Cadbury Trust.h6. Governance

Toronto and New York listed mining company Barrick Gold has announced a new executive compensation program to align pay “with the long-term interests of shareholders based on the principle of pay-for-performance”. It follows an extensive engagement with investors, the company said. “We believe our new system features the most shareholder-friendly, long-term compensation program of any Canadian company today, as well as among our peers in the global mining industry,” said Brett Harvey, Barrick’s Lead Director and Chairman of the Compensation Committee.

Laurence Fink, the chairman of BlackRock, the US-based asset management firm with over $3trn in funds under management, has written to the chief financial officers of companies in the S&P 500. He asked for their help in meeting clients’ needs to achieve “sustainable returns over the longer term”. It follows a similar letter to investee companies two years ago. Fink said: “BlackRock’s mission is to earn the trust of our clients by helping them meet their long-term investment goals. We see this mission as indistinguishable from also aiming to be a trusted, responsible shareholder with a longer term horizon.”

Swiss proxy firm Ethos has published a study showing that around half of the 100 listed Swiss firms it surveyed provide any information about their political contributions or charitable donations to shareholders. Moreover, of the 21 companies which said that they give money to politicians, only four informed shareholders what the total amount was. Of the 36 companies that disclose charitable donations to shareholders, 14 indicated what the amount was. Ethos is hosting debates on this issue in Geneva and Basle this month. Link

Shareholders in JPMorgan can reportedly pursue a class action claim against the investment bank relating to the $6.2bn “London Whale” trading losses scandal. Reuters reported that US District Judge George Daniels in Manhattan said the investors including pension funds could pursue claims that CEO Jamie Dimon and ex-CFO Douglas Braunstein knowingly hid the risks that the bank’s so-called Chief Investment Office was taking in early 2012.

The Climate Disclosure Standards Board (CDSB), the project run by the CDP (formerly Carbon Disclosure Project), has welcomed a recent move by the Australian Stock Exchange (ASX) to require listed companies to disclose their strategy for managing environmental and social sustainability risks. “I am delighted that the ASX has recognised developments in international reporting and in particular the momentum building behind greater transparency of environmental performance and risk,” said CDSB Executive Director Lois Guthrie. She called on regulators to do more to ensure that other exchanges follow ASX’s example.