RI ESG Briefing, April 20: PKA, Norges Bank, Sustainable Stock Exchanges, Facebook, PRI-Global Compact

The round-up of the latest ESG developments


Danish pension fund PKA, the country’s fourth largest at $35bn, has reportedly exited five Canadian oil producers. The Financial Times, citing head of responsible investment Pelle Pedersen, said it has divested Athabasca Oil, Canadian Natural Resources, Cenovus Energy, Imperial Oil and Suncor Energy. It will also review its investments in another 44 oil and gas companies. Pedersen told the paper “we have to accept what is happening right in front of our eyes”.

The New Zealand exchange NZX has joined the United Nations Sustainable Stock Exchange (SSE) initiative, the platform for exchanges to discuss environmental, social and corporate governance enhancements and stimulate discussions about sustainable investment. “Given the role NZX plays at the centre of New Zealand’s capital markets we have a unique opportunity to work with listed companies to encourage and enhance the quality of environmental, social and corporate governance reporting,” said NZX CEO Mark Peterson. As part of the initiative, NZX will also join United Nations discussions on Green Finance, which will investigate how stock exchanges can work with regulators, policy makers, listed companies and investors to better support the transition to greener and more inclusive economies.

SRI firms Trillium Asset Management and Green Century Capital Management have teamed up with campaign group 350.org to release a new guide for investors on fossil fuel free investing titled Make a Clean Break: Your Guide to Fossil Fuel Free Investing. The first version of the guide was launched in 2013 and updated in 2014. The new guide provides investors with insights and tools to eliminate fossil fuel companies from their portfolios and reinvest in clean, sustainable, and solutions-oriented investments that are advancing the transition toward a zero-carbon economy.

US university Johns Hopkins is ‘exploring’ the possibility of joining the growing student led divestment movement by excluding fossil fuel from its $3.8bn endowment. The university hosted a meeting including experts from investment management firm Brown Advisory and social progress foundation The Wallace Fund (which is itself 100% divested from fossil fuels) to discuss the ‘pros and cons’ of divestment. Link


Investment consultant Cambridge Associates will reportedly benchmark impact investments in real estate, infrastructure, timber and other real assets. According to Barron’s, citing Jessica Matthews, managing director at the firm, the benchmarks aim to set a standard for against which investors can gauge the performance of their impact portfolio. Cambridge tracks over 800 mission-related funds and will break out real assets funds by size, year, and intended impact.

The Minnesota Council on Foundations (MCF) and several Minnesota foundations, including The McKnight Foundation, Bush Foundation and Otto Bremer Trust, have announced what is being termed a “first-of-its-kind in the nation” impact investing collaboration. Already, there is more than $17.1 million committed to the impact investing collaborative, and the commitment is expected to exceed $20 million. It is invested in a fixed income bond fund focused on affordable housing and small business lending throughout Minnesota. Link. Governance

Norges bank Investment Management has said it plans to vote in favour of Swiss bank Credit Suisse’s remuneration resolutions at its AGM on April 28, although some proxy firms and Swiss pension-backed advisor Ethos are not supporting them. Credit Suisse said on April 13 that it had revised executive pay and Norges said it has had a number of meetings with the company’s chair and other directors on the topic. “We have a long-standing dialogue with the executive management and non-executive board members of Credit Suisse AG,” Norges said, adding the board has listened to shareholder concerns.

Facebook is facing proposals from shareholders on stockholder voting, lobbying, false news, gender pay and an independent chair at its AGM on June 1, according to its annual proxy filing. The shareholders aren’t named and the social media giant opposes all of the proposals.

Trillium has published a letter to shareholders of asset management firm T. Rowe Price calling for support of its Workforce Diversity shareholder proposal. The letter provides an overview of the importance of the issue as well as the four main reasons why we believe shareholders should vote for this proposal. The proposal asks the company to disclose workforce diversity metrics as well as diversity programs and policies. The SRI firm has filed similar proposal at PNC, Travelers, and First Republic Bank. Link

And Trillium has also teamed up with the Natural Resources Defense Council (NRDC) on a new paper called Assessing Corporate Performance on Food Waste Reduction: A Strategic Guide for Investors. The paper provides investors with key insights about assessing the risks and opportunities associated with food waste and why it should be an integral aspect of environmental, social, and governance analysis.

The UN-supported Principles for Responsible Investment (PRI) and UN Global Compact have called on companies to ensure that their corporate pension plans (“an untapped sustainability area”) mirror their own sustainability values. Aligning Values: Why corporate pension plans should mirror their sponsors includes case study examples from major corporate pension plans showing how companies have taken steps to make their plans sustainable. It also gives five steps a CEO could take to ensure their plan invests responsibly, such as signing up to the PRI. They say that of the 1,700-plus signatories to the PRI, less than 50 are corporate pension plans.

The Coalition against Bayer Dangers (CBG) is planning to demonstrate and protest outside German life sciences firm Bayer’s Annual General Meeting on the 28th April over the company’s proposed merger with US agrochemical and agricultural biotechnology corporation Monsanto. CBG claims that both companies’ activities pose serious risks to the environment and biodiversity.

A class action suit led by the Arkansas Public Employees’ Retirement System (APERS) against audio and electronics firm Harman International has had a $28.25m settlement, according to lead counsel Cohen Milstein. The suit alleged that Harman – now acquired by Samsung Electronics – issued “false and misleading statements” about the state of its Personal Navigation Devices business. APERS Executive Director Gail Stone said praised Cohen Milstein “after a long, hard-fought litigation”.