RI ESG Briefing, August 21: Australian super investors issue governance guidance

Environmental

The €80m bond issue from German wind park developer Wallenborn Adria Wind has failed due to insufficient investor demand. Company founder Hermann Wallenborn said that despite prolonging the subscription period until August 14, too few private and institutional investors had materialised. He added that his firm would now consider an alternative way of raising the capital, to cover the costs of a 42MW wind park now operating in northern Croatia. The bonds were to have traded on the Munich exchange’s m:access segment.
The second meeting of experts on long-term finance and climate change took place this week in Bonn, Germany under the auspices of the United Nations Framework Convention on Climate Change. Further details are available here. The next meeting scheduled is a wrap-up event in South Korea on September 10-12.

Community First, the Australian credit union, has teamed up with Nasdaq-listed solar company SunPower to introduce loans for homeowners in Australia. The SunPower Solar Loan is designed to help customers finance a high efficiency, residential SunPower solar system over time, as it produces electricity from rooftops. Said Community First Chief Executive John Tancevski: “We are happy to offer a longer than usual loan term with the SunPower Solar Loan because SunPower panels are guaranteed to produce more electricity than any others on the market for 25 years, generating greater long-term savings for our customers.”

The Church of England has been forced to issue a statement about its stance on hydraulic fracturing (‘fracking’) following reports that it was asserting its mineral ownership rights in the UK. It said it had no official “either for or against” stance on the gas extraction technique – but that there was a danger of viewing fracking “through a single issue lens and ignoring the wider considerations” such as fuel poverty. “Blanket opposition to further exploration for new sources of fuel fails to take into account those who suffer most when resources are scarce,” the Church said.h6. Social

Swiss private bank Notenstein, which is building a sustainable investment team to challenge stalwart J. Safra Sarasin, saw its profitability and sales decline sharply in the first half of 2013. During the period, Notenstein’s gross profit shrunk to CHF6.4m (€5.2m) from CHF35m a year earlier. Sales also were down 33% to CHF73.3m. Pierin Vincenz, chief executive of Notenstein parent Raiffeisen, attributed the declines in part to an unusually high number of liquidations in 2012, noting that this had boosted trading profits and sales. Raiffeisen, a cooperative bank, acquired Notenstein in early 2012 for CHF577m.

The Reserve Bank of India, the central bank, has permitted a firm in the southern state of Kerala to operate as a non-banking financial company that follows Islamic principles as a step towards developing sharia-compliant finance. Reuters reported that Cheraman Financial Services, in Kerala’s Kochi city, plans to offer leasing and equity-finance products under Islamic principles, having obtained approval to operate, with products expected by the end of August.

Governance

The Australian Council of Super Investors (ACSI), which represents 38 Australian funds with a collective A$350bn (€236.2bn) in assets, has published updated advice to companies on how it will assess company directors’ behaviours and performance. ACSI’s Governance Guidelines provide expanded context and commentary on investor expectations of board practices, executive pay structures and conduct during capital raisings. Key themes are director elections, executive pay, the so-called ‘two strikes’ rule on pay and capital raisings. Link

Mellon Capital Management, a multi-asset management firm with $313bn in assets under management, that’s part of the wider BNY Mellon group, has become a signatory to the Principles for Responsible Investment. Mellon Capital, which manages $30.4bn in socially responsible investing (SRI) and ESG mandates on behalf of its clients, becomes the sixth BNY Mellon ‘boutique’ to sign up to the PRI. The others are Standish Mellon, Siguler-Guff, Newton Investment Management, Insight Investment and Meriten IM.