RI ESG Briefing, April 22: Deutsche invests in Transport for London green bond

Environmental

Deutsche Bank has announced it will invest in Transport for London’s (TfL) £400m (€557.6m) inaugural Green Bond issue, which the Bank will hold within its Green Liquidity Portfolio launched earlier this year. Proceeds from the 10-year new bond issue will support the objectives of TfL’s Corporate Environmental Framework including the reduction of air pollution in London, improvements in natural resource management and preparing for the potential impacts of climate change. Deutsche Bank also acted as a lead manager on the TfL transaction. Colin Grassie, Deutsche’s UK CEO said: “Deutsche Bank is pleased to have both advised on and invested in the first ever Green Bond issue from Transport for London.” Other investors included Japan’s Nippon Life group.

Deutsche Bank also says it has provided a $92m (€85m) loan to finance the construction of an onshore wind park in Argue, Uruguay. The park, comprised of 50 turbines with a capacity of 52MW, is being developed by German wind power firm Sowitec. Once completed, Sowitec said the park would supply 75,000 people with power and save 118,500 tonnes of carbon emissions annually. Deutsche Bank also said that last year, it provided close to €1bn in capital to finance renewable projects that had a combined capacity of 1.8GW and were worth €4.3bn. Link

Canada’s Public Sector Pension Investment Board has reportedly made its first rural land purchase in Australia via central Queensland’s Hewitt Cattle Company. The fund, which runs assets for the pension plans of the Canadian Public Service and the Royal Canadian Mounted Police, acquired “pastoral legend” Sir Graham McCamley’s Oakleigh and Stoodleigh properties north of Rockhampton, according to Fairfax Media’s The Land site, for a deal worth around A$13m.

MSCI ESG Research has released a new report looking at the investment implications of rising sea levels and extreme weather. ‘Storms and Rising Seas: Mapping Climate Risk of Property and Power Assets’ uses geospatial analysis techniques and a “highly localized” dataset of approximately 60,000 properties and 8,000 power plants; the authors found that Asia-Pacific properties and US east coast power plants are particularly at risk.

Social

There’s been a call for research proposals for the ‘Restarting European Long Term Investment Finance’ project of the UK-based Centre for Economic Policy Research (CEPR) and Italy’s Assonime and Emittenti Titoli. It follows the publication of their Green Paper on Restarting European Long Term Investment Finance (RELTIF) earlier this year and a recent workshop on the topic. A second phase is being launched “to answer some of the questions raised” by the paper. In total, 12 papers will be commissioned at up to €10,000 per paper. Link

Big Issue Invest, the social investment arm of The Big Issue homeless publication, is calling upon early stage social businesses throughout England to apply for the Corporate Social Venturing (CSV) 2015 programme, which is tailored for early stage social businesses that often face challenges when it comes to securing finance. It is not necessary for applicants to be trading, though proof of concept is “essential”. The closing date for applications is May 25.h6. Governance

CalPERS and the New York City Pension Funds have written a further six letters to fellow shareholders in a range of US companies asking them to support ‘proxy access’ (shareholder access to director nominations process) proposals at their annual meetings. The companies include Occidental Petroleum, Marathon Oil, eBay, EOG Resources, Exelon Corporation and Hess Corporation. “Proxy access is fundamental to a sustainable system of corporate governance,” they write.

CtW Investment Group, the US union-linked investment advisory outfit, has asked fellow shareholders in New York-listed Service Corporation International to vote against the ‘say-on-pay’ proposal at the Texas-based funeral company’s annual meeting on May 13 – citing a “litany of pay issues”. They include a “bloated pay structure” whereby former CEO R. L. Waltrip receives over $5m a year as Executive Chairman, “weak” pay oversight and “undermined” performance metrics. The Compensation Committee is “making the mistake of compensating Waltrip more on the basis of his past services to the company as founder and CEO than on a competitive basis for his current services,” writes CtW Investment Group Executive Director Dieter Waizenegger.

SHARE, Canada’s Shareholder Association for Research and Education, has prepared an investor brief reviewing progress on health and safety initiatives in Bangladesh two years after the Rana Plaza disaster in Bangladesh. The report reviews what Canadian listed companies have reported about their activities. The four-page briefing says investors should be asking companies about their progress in achieving full remediation of safety issues within all of the supplier factories they use to manufacture their products – and comes up with a series of specific questions.

US asset management giant BlackRock has been fined $12m (€11.2m) by the Securities and Exchange Commission (SEC) for failing to disclose a conflict-of-interest created by a former manager of one of its energy funds. The SEC said that Daniel Rice, who oversaw BlackRock’s $1.7bn Energy and Resources Fund, was at the same time running a family-owned oil and natural gas firm. Following a partnership with a separate coal firm, the Rice family firm became one of the top holdings of the Energy and Resources Fund. BlackRock spokesman Brian Beades told Reuters: “This has been a learning experience for our firm and we have taken a number of additional steps to further enhance our policies and procedures.”

As You Sow, the US advocacy group for corporate social responsibility, has filed a shareholder proposal for Abbot Laboratories’ annual meeting on April 24 that would have the US pharmaceuticals and health care products company disclose which of its products have genetically modified organisms (GMOs) and what the firm is doing to eliminate them. Said Andrew Behar, CEO of As You Sow: “The vast majority of GMOs are engineered to sell more pesticides, and pesticide overuse is causing major environmental problems. Consumers associate Abbott brands with environmental problems, and this is a material risk to investors.”