RI ESG Briefing, April 16: Investors dismayed by key European Parliament carbon vote

Environmental

The Institutional Investors Group on Climate Change (IIGCC), which represents over 80 Europe-based investors and asset managers with €7.5trn in assets, has expressed its disappointment at the European Parliament’s vote against the emissions trading “backloading” proposal today (April 16). The measure would have allowed the supply of allowances to be curbed temporarily. IIGCC Executive Director Stephanie Pfiefer said: “As investors we will now look forward to discussing with EU policymakers how stable, supportive, long-term climate policies can best hasten the transition to a low-carbon economy.” The Carbon Markets & Investors Association said the future for the EU’s emissions trading scheme “now lies in robust and vigorous structural reform” that is depoliticized.

Oil major Chevron has pointed to affidavits from environmental experts at US-based Stratus Consulting disavowing their expert testimony over the disputed $19bn Ecuador Amazon pollution case. The latest development comes amid Chevron’s decision to litigate against some of its investors that are critical of its handling of the 2011 damages judgment.

Australia’s Macarthur Wind Farm – the biggest in the Southern Hemisphere at 420MW – has opened. The A$1bn (€789m) project is owned by Australian-based AGL Energy and New Zealand-based Meridian Energy and uses wind turbines from Denmark’s Vestas.

Social

New York City Comptroller John Liu and the city’s five pension funds have called on two of the largest for-profit universities, New York Stock Exchange-listed DeVry and Nasdaq-listed Career Education, to provide information on their students’ debt levels and ability to repay their loans. “We need to know if these for-profit degree programs are deceiving lower-income students with empty promises while drowning them in debt,” Liu said.

The investment committee of the $161.5bn California State Teachers’ Retirement System (CalSTRS) has agreed to divest from gun companies that manufacture weapons that are illegal in California. The decision follows the Connecticut school shootings last year and is in accordance with CalSTRS’ list of 21 Risk Factors. The divestment began in January with two publicly traded US companies within the CalSTRS portfolio: Sturm Ruger and Smith & Wesson. CalSTRS’ holdings in them amounted to about $3m via index funds.h6. Governance

ExxonMobil says it has responded to shareholder engagement on its executive compensation plans. For example, the oil company says it is providing additional detail on the formula used to determine annual bonuses, in response to requests. The company is facing a raft of ESG-related shareholder proposals at its annual meeting in Dallas on May 29. Among them are: independent chairman (Spinnaker Trust), majority vote for directors (United Brotherhood of Carpenters Pension Fund), report on lobbying (United Steelworkers), political contributions policy (Zevin Asset Management), equal employment opportunity policy (New York State Common Retirement Fund), fracking (New York City Pension Funds) and greenhouse gas emissions goals (Sisters of St. Dominic). Proxy

The International Integrated Reporting Council (IIRC) is calling on all stakeholders to consult on its “game-changing” corporate reporting model released today (April 16). The Consultation Draft of the International Integrated Reporting Framework will require organisations to assess and report the degree to which they are creating and destroying value over time in accordance with six capitals, namely financial, manufactured, intellectual, human, social and relationship, and natural. The Framework looks to bring corporate reporting in line with changes in the world economy, business and society, and address issues of financial instability and unsustainability. There will be a consultation until July 15.

Goldman Sachs, the US investment bank, is facing a series of environmental, social and governance proposals from institutional and private shareholders at its May 23 annual meeting in Salt Lake City, according to its proxy materials. The Needmor Fund has tabled a motion on political lobbying disclosure while there are proposals on forming a human rights committee (Jing Zhao) and director nominations/proxy access (James McRitchie). The company is advising shareholder to vote against the proposals.

The Local Authority Pension Fund Forum (LAPFF), the UK fund body, is advising its members to vote against the remuneration report at drugs giant AstraZeneca’s annual general meeting on April 25, according to Professional Pensions. The forum, which represents 57 public sector pension funds, published a voting alert explaining its stance on the firm’s award of a “golden hello” to Chief Executive Pascal Soriot.