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RI ESG Briefing, August 1: UK’s Avon fund considers PRI in emerging markets tender

The round-up of environmental, social and governance news

Environmental

Forestry investment firm New Forests, which has assets under management of A$1.8bn (€1.2bn), has agreed to cooperate on bioenergy and biofuel financing with Australia’s Clean Energy Finance Corporation (CEFC), the body set up to mobilise investment in renewable energy, low-emissions technology and energy efficiency. The new investments could include combined heat and power projects or renewable fuels projects featuring biodiesel or syngas associated with forestry investments in regional Australia.

Good Energy, the UK-based independent renewable energy supplier, has now raised a total of £2.68m (€3.1m), following its recent raising of a further £882,000 in its most recent share issue. The second round of funding let existing shareholders buy at a 125p per share. The firm, founded by Juliet Davenport, runs the Delabole Wind Farm in Cornwall and plans 110MW of new capacity by 2016.

Deutsche Bundesstiftung Umwelt (DBU), a €2bn environmental foundation set up by the German government, says that it financed 258 environmental projects last year at a cost of €47.6m. It means that the PRI signatory has provided €1.5bn for such projects since its inception in 1991, of which €530m has gone to promote energy efficiency and climate protection. Examples are the green renovation of old buildings, renewable technology and training for jobs in the renewable sector.

Social

The £3bn Avon Pension Fund says it will take the Principles for Responsible Investment into consideration in a new £150m emerging markets equities mandate. The assets, equivalent to around 5% of the total fund, will be benchmarked against the MSCI Emerging Markets Index with a rolling three-year out performance objective of plus 2 to 4 % per annum net of fees. The fund, based in Bath in western England, said: “The pension fund is working towards achieving the UN PRI standard and therefore will take this into consideration when evaluating the tender.” The deadline for receipt of tenders or requests to participate is September 10.h6. Governance

Institutional Shareholder Services, the leading US governance advisory firm, has launched its 2014 proxy voting survey. This year, the survey has been streamlined to encourage global market participants to provide regional input on issues that are pertinent worldwide. ISS will also conduct a variety of regional, topic-specific roundtables and conference calls to “drill into” local market best practices. The firm will then open a 30-day comment period for all interested market participants. Alongside executive pay, ISS is looking for input on board tenure, committee chair rotation and share authorizations. The survey period closes on September 13, with next year’s voting policies implemented on February 1 2014.

There is a lack of a “sufficient commitment” to sustainability from the board of Indian mining firm Vedanta, according to Aviva Investors. Aviva began to engage with the company in 2010, specifically over breaches of the OECD Guidelines for Multinational Enterprises. It said that a 29% underperformance of the FTSE All-Share Mining since 2010 can largely be “attributed to a lack of focus on sustainability issues”. The fund manager has commissioned a fourth report from research provider EIRIS evaluating performance against seven recommendations.

US sustainable fund manager Trillium says it directly engaged more than “two dozen” major US corporations with shareholder proposals and “hundreds more” via sign-on letters and other forms of outreach in the recent proxy voting season. Highlights included climate change, board diversity, workplace policies, network neutrality, “Too-Big-To-Fail” and privacy. Link

News and data giant Bloomberg says 7,779 of its customers are now using its environmental, social and governance (ESG) data, as at the end of 2012, compared to 5,747 in 2011 and 4,704 a year earlier. Bloomberg, in its new sustainability report, says it represents 47.7% annual growth. The firm researches 20,000 of the most actively-traded public companies and obtains ESG data disclosed by over 10,000 companies in 52 countries.