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RI ESG Briefing, August 11: Alberta Teachers, NEST, KKR, Trillium, Philippines’ governance

The round-up of the latest ESG developments

Environmental

The C$13bn (€11.6bn) Alberta Teachers’ Retirement Fund Board is part of a consortium that has bought Samsung Renewable Energy’s one-third interest in the 270MW K2 Wind Facility in Ontario. The other partners in the deal are Axium Infrastructure and Manulife Financial Corporation. The remaining two-thirds interest in the 140-turbine facility is held by Pattern Energy Group and Capital Power Corporation. “The K2 wind facility is an excellent renewable energy asset that further enhances our infrastructure portfolio,” said Rakesh Saraf, Head of Private Investments of ATRF.

NEST, the UK’s National Employment Savings Trust workplace pension scheme, has illustrated how its external fund managers include ESG factors in its new Responsible Investment report. It said: “Legal & General Investment Management (LGIM), which won the mandate to run our UK property fund, places an emphasis on its role in owning and developing properties in a sustainable way. It has a target of a 20% reduction in energy, carbon and water by 2020. In the last financial year it has reduced the carbon emissions across all properties by 17%. It has also reduced electricity and fuel use by 15% and 23% respectively and cut overall water use by 7%.”

Private equity giant KKR has launched the Eco-Innovation Award for companies it owns as part of its Green Solutions Platform environmental initiative. KKR said that the award is intended to reward current projects or initiatives within portfolio companies that are innovative, environmentally beneficial solutions that create business value. The announcement of the first award winner is expected later this year and the winner will receive a financial prize. “Elizabeth Seeger, Director at KKR and a leader of the GSP program, said: “We hope that by launching the Eco-Innovation Award, we are not only recognizing the achievements of our portfolio companies, but also inspiring them to identify new and enhanced ways of creating sustainable value.”

Social

There’s been a call for proposals from the EU Programme for Employment and Social Innovation (EaSI). It’s a call for proposals for operating grants open to EU-level NGO networks active in the area of social inclusion and poverty reduction or microfinance and social enterprise finance. The tender states: “In 2017, communication with member organisations may also focus on making a preliminary assessment of the impact that the EaSI financial instruments have on the microfinance and social finance markets, in order to identify concerns and expectations for the next programming period.” Link. Governance

SRI firm Trillium Asset Management has published a letter to shareholders of J.M. Smucker, the New York-listed food group, urging them to back a shareholder proposal asking the company to issue a report by January 2017analyzing and proposing how the company can increase renewable energy sourcing and/or production. Smuckers holds its AGM on August 17. “Implementing the proposal would allow investors to better assess the company’s risks and opportunities around renewable energy”, said Brianna Murphy, Vice President of Shareholder Advocacy at Trillium.

The Philippines’ Securities and Exchange Commission (SEC) has announced it will set out a revised version of its Corporate Governance Code by the end of 2016, after working on new guidelines alongside the IFC. Teresita Herbosa, the SEC’s Chairperson, said that the regulator was at the “tail end of the process” and that the new code might be considered “revolutionary”, but will be available for public comment in the near future. Though not compulsory, the updated guidelines will define standards of good practice when it comes to board leadership and effectiveness, corporate accountability, remuneration and investor relations.

Embattled UK retailer Sports Direct says its staff turnover for fiscal year 2016 has risen to 22% – up from 19% in the previous two years. “During FY16 22.0% of our UK salaried staff left the Group, an increase from 18.7% in FY15,” the firm said in its new annual report. It follows news earlier this year that the Trade Union Share Owners (TUSO), the activist investor group launched two years ago by the UK Trades Union Congress (TUC) and its two largest affiliated unions, Unite and UNISON are planning to file a shareholder resolution – a rare occurrence in UK corporate governance disputes – at this year’s annual general meeting, set for September 7. Sports Direct added: “With the aim of achieving our target of 25% female representation on our Board, we are actively seeking applications from female potential Non-Executive Directors.”

A group of shareholders lead by non-profit As You Sow and the Sisters of St. Francis of Philadelphia has filed a shareholder proposal urging US restaurant operator Yum Brands, which runs KFC, Taco Bell and Pizza Hut among other chains, to phase out the “harmful” use of antibiotics in its meat supply chain. The filers argue that many antibiotics are used to make animals grow faster or avoid sickness due to unhealthy living conditions and that their overuse can contribute to the rise of drug-resistant “superbugs” and poor animal welfare standards. Several of Yum’s competitors have taken similar action already: McDonald’s recently phased out antibiotics in its US chicken supply chain, with Wendy’s announcing that it would follow suit by 2017.