RI ESG Briefing, April 21: NY City Comptroller Scott Stringer backs green bond buying programme

The round-up of the latest environmental, social and governance news

Environmental

New York City Comptroller Scott Stringer has released a report detailing new market research and growing investor consensus that now is the time to implement a Green Bond program in New York City. Green Bonds offer investors a new way to participate in the financing of environmentally conscious projects such as providing for clean water and improving the energy efficiency of buildings, he said

Anne Stausboll, CEO at US pension giant CalPERS, called the 98% support for the climate resilience resolution at BP’s annual meeting a “game changer”. She said it sends a “strong signal to the financial markets that the time has come to make climate change reporting the new normal”. She added that CalPERS looks forward to working with fellow shareowners to ensure the resolution is implemented.

The Nordic Investment Bank (NIB), which is owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden, has successfully priced a new five-year SEK1bn (€107m) Environmental Bond. It was the NIB’s third and largest Swedish Krona denominated Environmental Bond to date and highlights its increasing commitment towards environmental funding and its leading role in the development of the Green Bond market. Proceeds will be used for financing loans to projects considered to enhance the environment in NIB’s member or EU countries. It said: “The transaction was driven by those investors integrating ESG considerations within their investment process. The participation rate of ESG investors was particularly high at 95%.”The joint bookrunners were Credit Agricole CIB and SEB.

Henry Paulson, the former US treasury secretary and ex-chairman and CEO of Goldman Sachs, has reiterated his call for the US to price carbon emissions. “It’s time for the United States to get its house in order through policies to curb and price carbon emissions,” he wrote in a commentary for McKinsey called ‘Short-termism and the threat from climate change’. He went on: “We must lead, first, because the stakes are high for our environment and for our economy.”

Social

Social finance intermediary Society Impact has announced the second Social Impact Bond in the Netherlands, an offering in Utrecht concerning the reduction of (youth) unemployment. “As with other social impact bonds, the contracts are structured on outcomes payment, meaning the investors (Rabobank Foundation and Start Foundation) will only be paid if the entrepreneur (The Colour Kitchen) achieves the agreed upon outcomes.”

New Zealand’s Ministry of Health is reportedly “well down the track” to pilot the country’s first social impact bond, which would pay out on measurably improved social outcomes such as reductions in alcohol/drugs use or recidivism. Business Desk said the government approved a pilot in October 2013, adding the Ministry was now at the stage of matching potential intermediaries and service providers.

BankTrack is transforming itself from being a network of civil society organisations to an independent campaigning body, a change it says is “the most substantial transformation in BankTrack’s 13 year history”. Its 2014 Annual Report covers BankTrack’s three major campaigns of 2014: forests, human rights and finance for the coal industry. BankTrack’s Director Johan Frijns said: “The new BankTrack will be a tracking, campaigning and support organisation, able to work more fluidly to support civil society organisations, but also able to pursue our own campaigns determinedly, as we have done in the past.”h6. Governance

The Sisters of Saint Francis of Philadelphia, Walden Asset Management and New Economy Project have written to fellow shareholders urging them to vote for their lobbying resolution at the JPMorgan Chase annual meeting on May 19. The proposal calls for a report on the bank’s policies and procedures governing the Company’s direct and indirect lobbying, and grassroots lobbying communications. It also looks at the company’s payments for direct and indirect lobbying and grassroots lobbying communications, including amounts and recipients. “We are concerned that JPMorgan Chase’s inadequate lobbying disclosure combined with its active, public lobbying against major aspects of financial reform presents significant reputational risk for the Company,” they say.

Shareholders in France’s Vivendi have reportedly rejected a resolution to deny long-term investors double voting rights. Agence France Presse said it denied activist asset management group PhiTrust the two-thirds majority required to block application of a French law granting double voting power to investors whose holdings date back more than two years. The provisions were introduced by the so-called Florange law.

Publishing group DC Thomson, the third-largest investor in beleaguered Alliance Trust, has reportedly thrown its support behind the firm which is facing a governance challenge from activist hedge fund Elliott Advisors. The Dundee-based publisher of ‘The Beano’ comic, has said it won’t support Elliott’s attempt to add three non-executives onto the board of the investment fund, the Daily Telegraph reported ahead of the trust’s AGM on April 29. Advisory groups ISS and PIRC have come out in support of Elliott’s plans, the report added.

A US court has reportedly refused to revive a class action against Royal Bank of Scotland accusing its senior management of misleading investors about the value of mortgage-backed securities. A class led by a pension fund of the International Brotherhood of Electrical Workers had filed the action but a federal judge found that nothing RBS executives justified a securities-fraud claim, according to Courthouse News Service.

The Wall Street Journal reports that fast food chain Wendy’s Co. has agreed to support a proxy access proposal allowing shareholders to nominate directors to its board. It follows similar moves by Citigroup and General Electric amid shareholder pressure on the issue. As a result of Wendy’s decision the City of Philadelphia Public Employees Retirement System has agreed to withdraw its own proxy access proposal. Link

It’s been reported that two of Canada’s largest pension funds plan to “demonstrate their unhappiness” with executive pay at the Canadian Imperial Bank of Commerce at CIBC’s annual meeting in Calgary on April 23. Reuters reported that the Ontario Teachers’ Pension Plan (OTPP) Board plans to withhold support for members of CIBC’s compensation committee and to oppose the bank’s pay structure in a nonbinding vote. And the Canada Pension Plan Investment Board (CPPIB), the report added, intends to vote against CIBC’s executive compensation stance. Staying in Canada, reports say that OTPP, British Columbia Investment Management Corporation and Dutch giant PGGM plan to vote against the board at mining giant Barrick Gold.