RI ESG Briefing, Aug. 12: Investor Group on Climate Change, NZ Super, LPFA, Robbins Geller

Environmental

The Investor Group on Climate Change, the Australasian investor body representing members with more than A$1trn (€658bn) in funds under management, says the Australian government’s new emissions reduction targets won’t deliver the certainty that investors are looking for. “The key question for investors is whether Australia’s target will deliver a credible signal for capital in managing the transition to a low carbon economy,” said IGCC CEO Emma Herd. “Shallow targets” would exacerbate investment risks and increase costs.

The United Church of Canada has voted 67% in favour of divesting its C$5.9m (€4m) of investments in the top 200 fossil fuel companies and “commit financially” to transitioning to an economy based on renewable energy. The vote was held by the 42nd General Council, the United Church’s highest body. “Given the lack of political and industrial leadership to address climate concerns in a way that matches the scale of the problem, we wanted to signal that we are so serious about averting climate crisis that we are willing to put our money where our mouth is,” said Christine Boyle, the General Council commissioner. Link

The London Pensions Fund Authority (LPFA), the £4.8bn (€6.6bn) local authority fund in the UK capital, has said it will not exit fossil fuels in response to a request from the London Assembly, which oversees the work of Mayor of London Boris Johnson. Last month, a report from the Assembly urged the LPFA to consider “managed divestment” from fossil fuels to reduce London’s environmental impact. The LPFA responded by letter, saying:“We do not expect fund managers to specifically invest or divest in certain sectors, but they are expected to take a responsible investment approach instead.” The letter also said the LPFA has less than 1% invested in fossil fuels.

Social

The New York Bankers Association (NYBA), which includes Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase, has successfully challenged the Responsible Banking Act, which calls for banks to document how they meet the needs of low-income neighborhoods. CNBC reports that a US federal judge has ruled that the law, which New York Mayor Bill De Blasio has been implementing, is unconstitutional. De Blasio’s predecessor Michael Bloomberg had refused to enforce the law. In a statement, NYBA President Michael Smith said: “This is an important decision for the banking industry with nationwide ramifications.”

The German city of Essen has been urged by a cooperation partner of the NGO ‘350.org’ to divest its shareholding in German energy giant RWE due to the latter’s involvement with coal. The city, which also serves as RWE’s headquarters, has an equity stake worth €339.4m in the company. Said the partner, called Fossil Free Essen: “RWE ranks as number 15 among the world’s biggest emitters of carbon dioxide, a main contributor of climate change. It has to stop!” With respect to the recent fall in RWE’s share price, Fossil Free Essen also said the city should divest the company before its stake became worthless. In the past year, the RWE share has fell from around €29 to just above €18. Link (German)h6. Governance

The New Zealand Superannuation Fund has become the latest investor to release its assessment and transparency reports from the Principles for Responsible Investment (PRI). Other investors to have done so include RobecoSAM and Edentree, the former Ecclesiastical Investment Management. New Zealand Super said the PRI has given the fund an A+ rating for its overall approach to responsible investment. CEO Adrian Orr said: “We believe that environmental, social and governance factors are material to long-term investment returns. Long-term investors such as the Fund have a strong financial incentive to manage environmental, social and governance risks, as well as to look for positive investment opportunities.” Link

US class action law firm Robbins Geller Rudman & Dowd has reportedly been awarded $60m in attorney’s fees in the Pfizer case, which reached a $400m settlement last month. Law360.com said the firm had been awarded the sum by U.S. District Judge Alvin Hellerstein for its role as lead counsel in a shareholder class action relating to the drugs giant. It was also granted $7.7m in expenses, the report added.

Aviva Investors, the UK fund management giant, has welcomed Standard Chartered’s withdrawal from the Carmichael coal-mining project in Australia. Abigail Herron, the firm’s Head of Responsible Investment Engagement, said the project’s impact on the Great Barrier Reef was a “very pertinent issue”. She added: “We have recently spoken with Standard Chartered to seek assurances about their involvement in the project and take great comfort from the announcement that they will be withdrawing from their advisory role with [developer] Adani.” Aviva sees the announcement as being in line with Standard Chartered’s policy to ‘restrict the provision of financial services to clients who…have impact upon and operations located within UNESCO World Heritage Sites.’ 


The UK’s leading firms are reportedly being pressed to address pay inequalities in their upper ranks. The Financial Times said the Davies Review – first set up to raise the number of women on boards – is considering setting a target for a quarter of top earners at FTSE 100 firms to be women. It quoted Denise Wilson, the Ecclesiastical Insurance board director who heads the review, as saying it aimed to identify the “biggest and most senior jobs” and monitor whether they were being awarded to women.

The Basel Institute on Governance (BIG), an NGO that promotes good corporate governance, has been given a three-year grant of almost $4m from the Siemens Integrity Initiative (SII). In a statement, BIG said Siemens’ funding would support its efforts and those of its partners, the UN Global Compact and the OECD, to root out corruption in the public and private sectors. Siemens launched the SII in 2009, endowing it with $100m to support projects like BIG. The launch followed a huge bribery scandal at Siemens itself, where payments were systematically used to gain business in emerging markets and then declared as a tax write-off. Link