RI ESG Briefing, April 29: Methodist finance board says tar sands, thermal coal plans “may lead to exclusion”

The round-up of the latest ESG news

Environmental

The Central Finance Board of the Methodist Church in the UK has recently published new position papers and policy statements on Climate Change, looking at the implications for different fuels. It says it would be “inconsistent” with the Methodist Church’s position for it to back companies’ investment plans that are significantly devoted to tar sands or thermal coal – and as such “may lead to exclusion”.

Advocacy group As You Sow has written to shareholders in energy firm Anadarko Petroleum calling for support for its proposal on carbon asset risk. The proposal asks Anadarko to analyze the risks to the company of an increasingly carbon-constrained energy market and to make its analyses transparent to shareowners. “It is only with these disclosures that investors can understand and assess the risk of Anadarko’s reserves becoming uneconomic to produce over short, medium, and long-term price horizons,” As You Sow argues, ahead of the AGM on May 12.

Terra Firma, the UK private equity firm headed by industry veteran Guy Hands, is reportedly working with Bank of America Merrill Lynch on the potential sale of portfolio firm EverPower Wind, the US-based developer of utility scale wind projects. Financial News, citing two people familiar with the matter, said a deal had the “potential to net the firm a handsome profit”.

Social

A new ‘big data’, cognitive computing ESG platform has been launched by TruValue Labs, a San Francisco-based start-up whose directors include Harvard University Professor Bob Eccles. Insights360 uses natural language processing (NLP) and machine learning to derive quantitative data from “semantic input” to create what is claimed to be “actionable sustainability data”. “By systemically analyzing big data and trends, Insight360 is able to quantify ESG performance and discover meaningful patterns for companies,” it says.

RepRisk, the Zurich-based ESG intelligence provider, has announced
that its data is being used by the Sustainability Accounting Standards Board (SASB), the US-based not-for-profit body that develops industry-specific sustainability accounting standards. “Our partnership with RepRisk allows us to include valuable data in our research process and enhance our standards with regard to ESG-related risks across industries,” said Jerome Lavigne-Delville, Chief of Standards Development at SASB.h6. Governance

Dimensional Fund Advisors, the $398bn US mutual fund firm, has reportedly
issued warning letters to companies about adopting poison pill anti-takeover measures without shareholder approval. Reuters reported the Texas-based asset manager has warned firms it invests in that it will vote against directors who approved those measures. The campaign will eventually target 250 companies, the report added, citing Dimensional’s co-head of portfolio management, Joseph Chi.

Shareholders in Citigroup approved the pay packages of the US banking giant’s senior management at its AGM on April 28, the Wall Street Journal reported. It added that a shareholder proposal, which the bank endorsed, to give institutional investors the chance to nominate members to the board (“proxy access”) passed with nearly 87% of the vote.

Shareholders in Canada-listed mining firm Barrick Gold Corporation rejected by what media reports
termed a “whopping three-quarters” of the votes the company’s non-binding ‘say-on-pay’ resolution at its AGM in Toronto yesterday (April 28). The Financial Post quoted Chairman John Thornton as saying the company will “go back and refine” its remuneration system. The vote followed advice from proxy advisory firms ISS and Glass Lewis and criticism from a range of pension funds, the report added.

Beverage giant Coca-Cola was facing pressure from institutional investors over executive pay at its AGM today (April 29), according to media reports. Reuters said at least two major pension funds, the California State Teachers’ Retirement System and the Canada Pension Plan Investment Board, had already disclosed their voting intentions. And advisory firm ISS had also recommended a vote against pay at the Atlanta-based company, it added.

Advisory firm PIRC is recommending a vote for a shareholder resolution calling for an independent review of North American school bus operations at UK transport firm National Express. This resolution has been put forward by a group of shareholders including UK based local authority pension funds and individuals representing the US International Brotherhood of Teamsters. It follows shareholder concern expressed at the 2014 AGM, where nearly 20% of independent shareholders voted to support or abstain on a proposal seeking greater board oversight of employment rights issues in its North American school bus operations. PIRC says a review would be a “reasonable request, in light of the significant negative publicity generated by this issue”. The company holds its AGM on May 6.