RI ESG Briefing, April 15: Sweden’s Arise issues wind farm-backed green bond

Environmental

Swedish onshore wind energy firm Arise AB has issued a SEK1.1bn (€121m) five-year green bond, secured against 10 wind farms in southern Sweden. Arise said it is the first senior secured bond issue in Sweden in the wind power sector and replaces current bank debt financing of the wind farms. “The interest for Arise and the bond has been strong,” said Arise’s Head of Corporate Finance Linus Hägg. “The fact that the bond also has an environmental quality stamp has been important for many investors.” The issue was certified by third-party firm DNV GL as meeting the Green Bond Principles. DNB Markets acted as financial advisor and sole bookrunner.

The future of the Sahara solar project known as Desertec is looking even more uncertain following an announcement by two industrial members of the consortium that they are leaving. German power giant E.ON and Bilfinger + Berger, a German construction firm, said that because the project was not moving forward, they were withdrawing. Desertec already suffered a huge blow last July 2013 when the foundation that had the original idea for the project severed its ties with the consortium.

US sustainability fund firm Trillium Asset Management has announced that it has withdrawn a shareholder proposal (filed on behalf of the Christopher Reynolds Foundation) at Panera Bread, the Nasdaq-listed bakery/café chain. It follows a commitment from the St. Louis-based company to publish a sustainability report by December 1, 2015. Panera will conduct a materiality assessment in 2014 in order to identify and prioritize issues that are material to the company, Trillium added.

John Laing, the UK-based infrastructure investor and asset manager, says it has achieved financial close for the Dungavel onshore wind farm in Scotland. John Laing is the sole investor in the facility, which was acquired from energy giant E.ON in October 2013. Dungavel will have an installed capacity of 26MW generated by 13 Vestas turbines. The senior debt for the facility will be provided by the Bank of Tokyo-Mitsubishi UFJ Ltd., with existing funding provided by John Laing.

Social

The Falkirk Council Pension Fund in central Scotland has awarded a £30m (€36.4m) mandate to real estate fund manager Hearthstone Investments to invest into social and affordable housing within Scotland. The investment will form the first stage of a new Housing Fund for Scotland, managed by Hearthstone. The fund is the first of its kind and allows pension funds to invest in local housing infrastructure.

Evangelische Kreditgenossenschaft (EKK), a German church bank, has been named “Best Sustainable Investor for 2014” by German trade magazine Portfolio Institutionell. EKK cited its “thoroughly sustainable investment process” and its efforts to promote sustainable investing within Germany’s institutional market, as the reasons for the award. EKK is currently in talks with peer Evangelische Darlehnsgenossenschaft (EDG) to create a church bank with 500 employees and a balance sheet worth €7.7bn.h6. Governance

Hermes Fund Managers, and its engagement arm Hermes Equity Ownership Services, are aiming to become one of the first signatories to Japan’s new Stewardship Code. Institutional investors have until the end of May 2014 to join the initial list of signatories to the Principles for Responsible Institutional Investors. Hermes EOS says it worked closely with Japan’s Financial Services Agency on the drafting of the comply-or-explain code, said Hermes, which is owned by the BT Pension Scheme.

Hermes EOS, Aberdeen Asset Management and F&C have hailed their engagement with Petrobras, the Rio de Janeiro-based energy company, which has become the first Brazilian company to publicly disclose the names of minority shareholder nominees for election to its board at AGM (on April 29). The investors, who have led an engagement with the company since 2012, said the move sets a precedent in Brazil.

Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, have recommended opposing the re-election of Andrew Balson as Chairman of the Compensation Committee at Domino’s Pizza due to concerns over CEO Patrick Doyles’ pay. It follows a letter from union-linked CtW Investment Group to fellow investors calling on them to oppose Balson and Domino’s “say-on-pay” given what CtW calls the company’s “egregious equity grants” and the “excessive and potentially risky” focus on short-term performance in Domino’s pay plans. The company holds its AGM on April 29.

The German Association of Critical Shareholders (DKAA) has filed a shareholder proposal at German energy giant RWE that would have RWE cut its dividend to €0.50 per share and use the €307m in savings to protect jobs at the company and to invest more in renewables.

TIAA–CREF, the US financial services provider with some $569bn under management, has agreed to buy fund firm Nuveen Investments for $6.25bn including debt. Nuveen, which has around $221bn in assets under management, is being acquired from an investor group led by Madison Dearborn Partners. Nuveen will operate as a separate subsidiary within TIAA–CREF’s Asset Management business; John Amboian will remain CEO and its current leadership and key investment team will stay in place.