Environmental
There was 21% support last week for a renewable energy proposal filed by a group of SRI investors at US food group JM Smucker. Nearly $1.9bn worth of shares voted in favor of a proposal requesting greater disclosure around the company’s renewable energy opportunities. The shareholder proposal filed by Trillium Asset Management, along with co-filers Calvert Investments, Clean Yield Asset Management, and Green Century Capital Management. ISS Proxy Advisory Services had recommended that shareholders vote for the proposal. Link
The $6.3bn MacArthur Foundation has announced $50m in grants which it called a “down payment” on a major new commitment to help curb global climate disruption by significantly reducing greenhouse gas emissions. Its initial focus is on building and sustaining sufficient US leadership to ensure it meets its own responsibilities in addressing climate change. “In the future, the Foundation will also explore ways to use grants and impact investments, and other means, to be a constructive partner to other countries,” it says. Link
The growth of green investment is being held back by short-termism in pension fund and investment consultant relationships, according to new research from the University of Oxford. The Stranded Assets Programme at Oxford’s Smith School of Enterprise and the Environment has undertaken a comprehensive study of the role of investment consultants in green investment. Investment consultants are key ‘gatekeepers’ for asset owners, such as pension funds, and are instrumental in determining whether innovative ideas are accepted or not by the financial community. Ben Caldecott, Director of the Stranded Assets Programme said, “The expansion of green investment is being held back unnecessarily by inadequate pension fund-investment consultant relationships.” Link
Social
In a move similar to the Catholic Church this year, Islamic leaders have called on all Muslims to play an active role in combatting climate change and have urged governments to reach an “equitable and binding” agreement on climate change in Paris this year. The Islamic Declaration on Climate was adopted at the International Islamic Climate Change Symposium in Istanbul this week. Link
ClimateCare, a UK-based corporate environmental consultancy, has received certification as one of the UK’s Founding B Corporations. Referred to as “the highest standard for socially responsible business” Certified B Corporations go through a rigorous assessment of their business practices and are judged to achieve higher standards of social and environmental performance, transparency and accountability. “I’m delighted to be joining this international community of forward thinking socially and environmentally conscious businesses,” says CEO Edward Hanrahan.
Triodos Bank, the Central Finance Board of the Methodist Church and Epworth Investment Management are the latest investors to have joined the Business Benchmark on Farm Animal Welfare, an international collaborative initiative aimed at encouraging major global food companies to strengthen their management systems and processes on farm animal welfare. The Benchmark is supported by Compassion in World Farming, World Animal Protection and Coller Capital.
Link to website. Governance
A US appeals court has confirmed that the Securities and Exchange Commission (SEC) may not force US companies to disclose whether their products contain minerals sourced from the war-torn Democratic Republic of Congo (DRC) or not. In a 2-1 decision, the court upheld an earlier ruling stating that if the companies were compelled to such disclosure, this would violate their Constitutional right to free speech. The decision marks a big victory for the three US business lobbies which challenged the disclosure requirement in the courts after it was included in the 2010 Dodd-Frank legislation. The ruling upholds the rest of the SEC’s conflict minerals rules. Companies still must conduct due diligence and file reports to the SEC with their findings, but they do not have to state whether the products are deemed “DRC conflict free” or not.
The California Public Employees’ Retirement System is requiring its external private equity fund managers to disclose the fees they extract from their portfolio companies, according to a Wall Street Journal report. It quoted the giant fund’s Chief Investment Officer Ted Eliopoulos as raising the issue during a CalPERS investment committee meeting. The fund is working with trade body the Institutional Limited Partners Association to look at what information private equity firms should disclose, it quoted him adding.
The Canadian Coalition for Good Governance has announced the recipients of its 2015 “Governance Gavel” awards. The awards were presented at the 17th Annual Corporate Governance Conference hosted by the Canadian Society of Corporate Secretaries earlier today in Montreal. Best Disclosure of Board Governance Practices and Director Qualifications went to Methanex Corporation while Finning International had Best Disclosure of Approach to Executive Compensation. The award for Best Disclosure of Governance Practices by a Small-Cap Issuer went to Canadian Western Bank. The awards were created in 2005 to recognize excellence in shareholder communications.
The Securities and Exchange Commission, the US regulator, has announced that two Citigroup affiliates have agreed to pay nearly $180m to settle charges that they defrauded investors in two hedge funds by claiming they were safe, low-risk, and suitable for traditional bond investors. “The funds later crumbled and eventually collapsed during the financial crisis,” the SEC said. An SEC investigation found that the Citigroup affiliates “made false and misleading” representations to investors. They consented to the SEC order without admitting or denying the findings.
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