RI ESG Briefing, Aug. 28: AP2 staff undergo obligatory human rights ‘basic training’

Environmental

Lane Clark & Peacock (LCP), the UK investment consultants, have concluded that while the impact of climate change on life expectancy is uncertain, climate change “isn’t expected to be significantly financially adverse for UK pension schemes over the next 20-40 years”. The observation was made in LCP’s new Longevity Report.

Australia’s Sunsuper has awarded its first green bond mandate to Affirmative Investment Management (AIM), the London-based fixed income impact investor. The A$150m (€91m) mandate will see AIM deliver an annual report detailing the bonds’ impacts on global sustainable development, and climate change mitigation and adaptation, as well as details of the financial returns.

Australia needs a “green finance wave” if it is to meet its carbon targets, two new reports from the London-based Climate Bonds Initiative have argued, saying the country has yet to make the most of the sustainable investment opportunities. The Australia-focused reports identify a pipeline of over 400 investable green infrastructure projects, and provide a detailed analysis of domestic green investment.

French railway network manager SNCF Réseau has launched the world’s first 100-year green bond – a €100m offering that will finance railway maintenance, optimisation and expansion – nearly doubling the previous record maturity of 60 years. Having already raised €5.4bn through its Green Bond Programme, the firm with this issuance comes in second in the French green bond market and seventh globally.

Social

Swedish buffer fund Andra AP-fonden (AP2) says that, in order to continue integrating sustainability issues, it completed a reorganisation in the spring and that its sustainability analysts are now part of the asset management’s strategy department. It added that all employees complete the fund’s obligatory sustainability training and that an internal obligatory basic training in human rights was completed in the spring. AP2 added it has divested from a total of about 60 tobacco companies and companies involved in the maintenance and modernisation of nuclear weapons systems. Link

Plastic could become the next stranded asset, according to an assessment by the MSCI ESG Research Team for World Water Week.

Institutional Shareholder Services (ISS) has released a paper exploring investor and corporate responses to US gun crime. The paper can be downloaded here.

The Church Pension Group (CPG), a financial services organization serving the US Episcopal Church, is to organise a series of panel discussions exploring shareholder engagement trends beginning in September. Link. Governance

The California State Teachers Retirement System (CalSTRS) has reportedly filed a motion to be added to a derivative lawsuit against Facebook’s leadership, including Chairman and CEO Mark Zuckerberg. Pensions & Investments was quoting pension plan spokesperson Vanessa Garcia.

IAG, Australia’s largest general insurance company, is facing a resolution calling on it to disclose and set a timetable for reducing its fossil fuel investments. According to environmental campaign group Market Forces, which filed the resolution on behalf of over 100 shareholders, investors are not able to determine IAG’s coal, oil and gas investment exposure, or its expected trajectory, because terms used in its Climate Action Plan are “undefined and ambiguous”. An IAG spokesperson reportedly said the group had a “just 0.13% of its portfolio … exposed to higher risk companies”, as defined under MSCI’s Low Carbon Reduction criteria.

Swedish buffer fund AP3 has committed to halving its carbon footprint and doubling its allocation to green bonds and sustainable investments by 2025, according to its recently published interim report. Green bonds will reach SEK30bn (€2.8bn), the fund said, while other sustainable investments will increase to SEK25bn (€2.3bn). It adds that it will perform climate risk and opportunity scenario analysis, and halve and report on its carbon footprint by engaging investees to reduce their climate impact.

New York City Comptroller Scott Stringer has requested that pharmaceutical giant Johnson & Johnson “enforce its clawback policy to hold any executive responsible for misconduct financially accountable” in his capacity as company shareholder. The statement was made after Johnson & Johnson was slapped with a $572m fine by Oklahoma for its role in the US-wide opioid crisis.

Japan’s MUFG Bank is setting up a 10-strong ESG department, as its holding company Mitsubishi UFJ Financial Group announces it is signing the Principles for Responsible Banking. MUFG Bank’s new department will provide financing to companies based on ESG ratings, encourage clients to work on ESG issues, and consider making its own investments.

Archbishop of Canterbury Justin Welby has called on investment managers to push companies to reduce their impact on the environment. Quoted by the Guardian, he said fund managers had “not sufficiently stepped up to the plate” to use their ownership of companies to press for change. He was speaking in support of a Global Ethical Finance Initiative summit next month in Edinburgh.

Three in ten FTSE100 companies have pledged to cut their pension payments for executives in response to pressure from shareholders, UK trade body the Investment Association said.