RI ESG Briefing, August 18: GIC, TIAA-CREF, Schroders, EPA, BNY Mellon, As You Sow

The round-up of the latest ESG news

Environmental

Singapore’s state investor GIC is in talks with India-based, London AIM-listed clean energy firm Greenko Group. Greenko said it has signed non-binding “heads of terms” with GIC for the sale of its entire holding in Greenko Mauritius for £162.8m (€230.5m). “The disposal if completed would result in the sale of the company’s trading activities and assets, which comprise the development, ownership and operation of clean energy projects in India,” it said. A further announcement would be made later. Greenko is being advised by Investec Bank and Arden Partners. Greenko has an installed operational capacity of 838MW.

Climate change could result in a “broader and deeper” insurance-linked securities (ILS) market, according to a new analysis from asset manager Schroders in combination with specialist consulting firm Secquaero Advisors. “In the long run, the impact of climate change may lead to a higher (re)insurance demand, both in regions which are already exposed and in new geographical areas,” write Secquaero’s Natural Catastrophe Specialist Christophe Etienne and Tim van Duren, Investment Director, Insurance-linked Securities at Schroders. “This could result in a broader and deeper ILS market due to new investible risks becoming available.”

The US Environmental Protection Agency (EPA) is set today (August 18) to propose the first-ever federal regulations to cut methane emissions from the nation’s oil and natural-gas industry. The Wall Street Journal, citing people familiar with the move, said the EPA was expected to put forward rules to cut emissions of the harmful greenhouse gas from the sector by 40% to 45% over the next decade.

Social

BNY Mellon, the US banking and custody giant, has released a white paper exploring the social impact investment space as it engages in a company-wide conversation on the value of social finance to its business. Speaking to Responsible Investor, Anna Kearney, vice president of corporate social responsibility, said while the organisation had no dedicated social finance products, it was looking at the sector holistically, as a way to build on what it is already doing. “There is a lot of momentum on how BNY Mellon’s business can intersect with social finance,” she said. Link

The Dutch Ministry of Foreign Affairs says it is looking for an asset manager to handle grant money that will be used to help “marginalised and discriminated groups have their voices heard when putting issues on political and corporate agendas.” Calling the initiative ‘Voice,’ the ministry stated on the EU’s TED tenders platform: “The organisation to be selected for the role of fund management agent possesses the right networks, expertise and experience to reach the most marginalised and discriminated groups and can coordinate a large grant fund.” More details on the selection criteria are to be published next month.

The Trades Union Congress (TUC), the UK’s umbrella union body, says income inequality has now reached “stratospheric levels”. It followed new data showing the CEOs of companies on the FTSE100 index now earn 183 times more than the average full-time worker. TUC General Secretary Frances O’Grady said: “Ordinary employees need to be included in workplace pay committees to add some common sense and reality to boardroom pay decisions.”h6. Governance

US investment firm TIAACREF and its Nuveen Investments subsidiary are hosting a live interactive webinar on the role and evolution of Responsible Investment in portfolio construction. The event will take place on Asset TV on Wednesday, August 19, at 4:30 ET, and is open to both financial advisors and their clients. “Responsible Investment has matured into a robust and measureable security evaluation process shaping investment criteria selection across the industry,” they said in a statement.

Shareholder advocacy group As You Sow has filed a notice of intent to bring legal action against Soylent, a “meal replacement” powder that has featured in recent media reports of Silicon Valley workers using the product to eliminate the need for food. The 60-day notice alleges violation of California’s Safe Drinking Water and Toxic Enforcement Act for failure to provide sufficient warning to consumers of lead and cadmium levels in the Soylent 1.5 product, As You Sow said. Soylent rejected As You Sow’s claims saying: “Soylent does not have unusual or unsafe levels of lead, cadmium, or any metal. As You Sow’s legal claim is that we do not display the required Proposition 65 notice, which is incorrect.”

A Kansas judge has ordered US telecoms firm Sprint Corporation to pay $131m to investors to settle a class-action lawsuit related to Sprint’s ill-fated merger with peer Nextel. Represented by the law firm Robbins Geller, the investors claimed that, following the 2005 merger, former Sprint CEO Gary Forsee and other officials illegally inflated the company’s stock and bond prices. The class-action was first filed in May 2009. Link

Shareholders of US firms traded on the S&P 500 bellwether index have voted on 536 proposals so far in the 2015 proxy season compared with 500 at the same time last year, according to data supplied by the law firm Sullivan & Cromwell. As in 2014, roughly two-thirds of the proposals concerned corporate governance as well as social and political issues. The data also reflect that the number of proposals calling for proxy access skyrocketed, climbing fivefold to 82 in 2015 from 17 in 2014. In addition, more than half of the proxy access proposals (48) were approved by shareholders of the S&P 500 firms.

The National Association of Corporate Directors (NACD), the US membership body, says increased board turnover at listed US companies will likely lead to the boards becoming more diverse. According to the NACD, the prediction is based on a survey of company it recently conducted. In it, 72% of respondents said their board added or replaced at least one director in the past year. The survey also reflected that 74% of respondents were “actively discussed” hiring more women, while 61% discussed racial and ethnic diversity. Link

Bank of America is to hold a special meeting on September 22 to allow shareholders to vote on its decision in October last year to give CEO Brian Moynihan the title of chairman. The decision upset some shareholders as it reversed a 2009 bylaw change that required the roles to be split. The Charlotte-based said in a filing that it has been through a “transformation” since then.

Almost three-quarters of investment professionals worldwide are taking ESG factors in account when investing, a survey from the CFA Institute and the Investor Responsibility Research Center (IRRC) finds. Sixty-four percent of the more than 1,300 respondents said governance issues were paramount. This was followed by environmental (50%) and social issues (49%). As for the rationale, 63% said it was to better manage risk, while 44% said their clients demanded it. Another 38% equated ESG performance with management quality.