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RI ESG Briefing, April 30: Investors target Walmart over executive pay clawbacks

The round-up of environmental, social and governance news

Environmental

The Investor Group on Climate Change, which represents institutional investors with over A$900bn (€707bn) in assets, has welcomed the announcement that Australia’s new Clean Energy Finance Corporation has received its investment mandate. “Organisations like the CEFC can attract and support private sector interest in low carbon investment and address gaps in financial services markets,” said Nathan Fabian, Chief Executive of the IGCC. “We think co-financing will quickly become a crucial part of the low carbon investment landscape.”

German wind concern PNE WIND AG plans to offer a five-year €100m corporate bond – at an interest rate of 8.0%. The bond will be offered in Germany, Luxembourg and Austria and the subscription period runs from May 4-10. Proceeds will be used to “fund further growth” including the financing of its acquisition of 54% of wind developer WKN. “Further possibilities of use are the development of the onshore and offshore pipeline by the purchase of projects in Germany and abroad as well as the interim financing of the equity of German wind farm projects.” Announcement

The European Investment Bank launched its first Climate Awareness Bond of 2013 earlier this month. The six-year SEK500m (€58.5m) issue was 60% allocated to fund managers, with 40% going to banks. The joint bookrunners were Skandinaviska Enskilda Banken and Bank of America Merrill Lynch. “There are clear signs of asset managers now joining the asset owners in climate investments,” said Christopher Flensborg, Head of Sustainable Products and Product Development at SEB. Link

Social

Leading figures in the US responsible investment sector have applauded guidance from the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency directing banks to stop making predatory loans. The statement was supported by, among others, the Interfaith Center on Corporate Responsibility, the Center for Responsible Lending, Trillium Asset Management and the AARP (the American Association of Retired Persons).

A new £14m (€16.5m) social impact bond fund has been launched by the UK’s Bridges Ventures and Big Society Capital. It will invest in charities and social enterprises that improve social outcomes in education, employment, housing and care for vulnerable young people. It will be managed by Bridges with Big Society Capital acting as cornerstone investor alongside the Bridges Social Entrepreneurs Fund, Omidyar Network and Panahpur.h6. Governance

The $52.4bn UAW Retiree Medical Benefits Trust is leading a $300bn global coalition of investors that has filed a proposal with Walmart to increase the retail giant’s transparency on executive pay clawback policies. The motion will be considered by investors at the company’s June 7 annual meeting. Investors backing the proposal alongside UAW include the Connecticut Retirement Plans and Trust Funds, the Amalgamated Bank LongView Funds, Sweden’s AP1, AP3 and AP4, F&C Management Ltd. and the Illinois State Board of Investments. Link
With the first results of the current annual general meeting season starting to come in, the Local Authority Pension Fund Forum – which represents 55 local authority pension funds with £115bn in assets – says it is “not clear yet” whether this year’s shareholder engagement will continue with the same momentum as 2012’s ‘shareholder spring’. The LAPFF has already issued voting alerts on major corporates AstraZeneca, Barclays and National Express.

The Green Century Equity Fund, the US fund which tracks the MSCI KLD 400 Social Index, is urging shareholders to back its resolution calling for cosmetics giant Avon Products to phase out hazardous chemicals from its products. Lucia von Reusner, shareholder advocate for Green Century Capital Management, said Avon needs to respond to customer concerns that the products they use may contain toxic chemicals.

Shareholders in Credit Suisse approved the 2012 compensation for executives at the bank’s annual meeting, yet due to opposition from shareholder groups the vote was far from unanimous. In the consultative vote, 88% of shareholders voted for the compensation, which includes a 34% raise in pay for CEO Brady Dougan to CHF7.8m (€6.3m). The hike comes despite a 22% slide in operating profit to CHF2.1bn during 2012. Ethos, which votes on behalf of dozens of Swiss pension schemes, and Actares, a Swiss retail shareholder group, had urged fellow shareholders to reject the pay proposal.

UK workplace pension provider NEST, the National Employment Savings Trust, has set out its views about how it expects UK corporates to act – and how it intends to be an “effective steward”. The policy has been developed in partnership with its responsible ownership partners, fund firm The Co-Operative Asset Management and voting researcher Manifest as well as equity fund managers UBS and F&C. The policy will hold its fund managers to account on the decisions they make, the body added.