RI ESG Briefing, April 6: Canada Pension Plan Investment Board in $2.5bn agri move

The round-up of the latest ESG developments


The Canada Pension Plan Investment Board (CPPIB) has acquired a 40% stake in Glencore Agricultural Products, the agricultural arm of mining and commodities giant Glencore, for US$2.5bn (€2.2bn). Glencore Agri comprises over 200 storage facilities, 31 processing facilities and 23 ports worldwide. When the deal closes, it will be governed by its own board of directors, with CPPIB having the right to appoint two directors. Mark Jenkins, Global Head of Private Investments at CPPIB, said: “As an asset class, agriculture is an excellent fit for a long-term investor like CPPIB.” He added it was a “compelling opportunity that aligns with CPPIB’s long-term investment horizon”. Link

Credit Suisse, the Climate Bonds Initiative and Swiss investment advisers Clarmondial have released a white paper on debt investment to support ecosystems such as food, water and the climate. The white paper, “Levering Ecosystems: A Business-focused Perspective on How Debt Supports Investments in Ecosystem Services” explores how businesses can use debt – bonds, loans and other securities – as a tool to restore, rehabilitate and conserve the environment while creating financial value.

GRESB, the investor-backed global standard for environmental, social and governance (ESG) benchmarking for real assets, has announced the launch of the 2016 GRESB assessments. This year GRESB is expanding its scope to evaluate the sustainability performance of real assets with four distinct assessments – the GRESB Real Estate Assessment, the GRESB Developer Assessment, the GRESB Debt Assessment and the inaugural GRESB Infrastructure Assessment.


Banking giant JPMorgan Chase & Co. has launched PRO Neighborhoods, a $125m, five-year initiative to identify and support solutions for creating economic opportunity in disadvantaged neighborhoods across the US. It will invest in “collaborative partnerships and innovative financial solutions” to revitalize neighborhoods by growing small businesses, creating health and social service facilities, improving access to affordable housing and collecting better data to study changing neighborhood demographics.

The FT reports that HSBC, Credit Agricole, Babson Capital, MassMutual, the European Investment Bank and an arm of the World Bank are among a group of nine to have committed $8bn to the Catalytic Finance Initiative (CFI) from the Bank of America Merrill Lynch. The CFI, launched in September 2014 after the UN’s Climate Summit Finance Session, originally promised to raise at least $10bn to accelerate clean energy investments that reduce carbon emissions. Link. Governance

Proxy advisory firm Glass Lewis has reportedly advised clients to vote against the compensation packages at BP’s annual general meeting. It is critical of the oil firm’s decision to award senior directors their maximum bonuses for 2015, Seeking Alpha reported. BP holds its AGM in London on April 14.

The Taiwan Stock Exchange held a forum on stewardship last month to help get institutional investors to make a greater commitment to corporate governance. The event on March 29 featured Jamie Allen, secretary general of the Hong Kong-based Asian Corporate Governance Association and Jerry G. Fong, a law professor at National Chengchi University, and Hans-Christoph Hirt of Hermes Equity Ownership Services.

Prosecutors in the US have reportedly charged two former State Street executives for allegedly plotting to defraud six clients, including Irish and UK government pension funds. Reuters reported that Ross McLellan, a former State Street executive vice president, was arrested for securities fraud and wire fraud. It added the indictment also charged Edward Pennings, a former senior managing director at State Street’s London office. It quoted the former’s lawyer as saying McLellan “committed no criminal acts and had no criminal intent.” And State Street said in a statement that it was cooperating with the investigation.

T. Rowe Price has become the second US asset manager to face a shareholder proposal asking it to clear up an alleged discrepancy between its publicly expressed concerns about climate change and the stance of its funds toward the issue. The proposal, to be voted on at the firm’s AGM on April 27, was filed by a coalition of US-based socially responsible investors. They include Zevin Asset Management, which is also the proposal’s architect along with Walden Asset Management and Trillium Asset Management. T. Rowe Price is urging its shareholders to reject the proposal on the grounds that it is unworkable. Although T.Rowe Price says that as a company, it has tackled the issue of climate change by, for example, switching to solar power at its Maryland headquarters, its board is powerless to intervene with its funds. Proxy

The Initiative for Responsible Mining Assurance (IRMA), the coalition of NGOs, mining firms and business groups founded in 2006, has released its second and revised draft Standard for Responsible Mining. It will undergo a 60-day comment period ahead of the first-ever global certification program for industrial-scale mine sites, planned to begin in late 2016. The new draft reflects the input from over 1,400 points of comment contributed by more than 70 organizations and individuals worldwide, including industry and technical experts. The Standard will cover mine sites, not mining companies, and will not certify extraction of energy fuels. Link