RI ESG Briefing, August 25: AP2 vehemently denies land-grabbing allegations

Environmental

Sweden’s AP2 has strongly denied suggestions that it is involved in ‘land grabbing’ in Brazil. “As for the accusation of ‘land grabbing’, I should like to stress that the Fund does NOT engage in such activity,” said CEO Eva Halvarsson in the SEK300bn (€31.6bn) fund’s latest half-year report. “The agricultural investments made by the Second AP Fund pertain to large-scale farms with clearly established proprietary rights acquired by equal parties.” A report commissioned by a European Parliament human rights committee earlier this year specifically mentioned AP2 and Dutch civil service pension fund ABP as being involved in landgrabs.

AMP Capital, the A$160bn (€107.8bn) Australian fund manager, has invested in Evergen, a new business in clean energy and energy efficiency, in Australia. Evergen, which has just launched, sells and manages intelligent home energy systems comprising solar power and batteries, which is based on technology provided by the Commonwealth Scientific and Industrial Research Organisation (CSIRO). The Evergen system continuously analyses and optimises home energy costs always choosing the most efficient source between solar, battery and the grid.

Pax World, the SRI investor, has become the latest member of the Climate Bonds Initiative Partnership program. Pax, which launched the first socially responsible mutual fund in 1971, currently holds more than $30m in green bonds. Julie Gorte, Senior Vice President for Sustainable Investing, at the firm said: “If this burgeoning new asset class is going to survive and grow, it needs discipline in terms of how bonds are classified among all the shades of green – the Climate Bonds Initiative helps bring that discipline to this exciting market.”

Social

The Bridges Property Alternatives Fund IV has made its first deal since it held a first close on £168m recently. In a joint venture with HUB Group it has acquired a brownfield development site in UK town Croydon south of London that it plans to regenerate with low-cost, sustainable housing. The site has been acquired from Croydon local authority in an off-market transaction.

Concerns have been raised about the lack of member representation overseeing the radical changes to UK local authority pension funds that are in the process of pooling. Professional Pensions reports that people said without member representation, they would be unable to ensure that responsible investment strategies were being implemented by the pools.h6. Governance

The Local Authority Pension Fund Forum (LAPFF) will back a shareholder resolution at embattled retailer Sports Direct’s upcoming AGM calling for an independent review of the UK retail group’s human capital management strategy to be undertaken and published. LAPFF, whose members manage local authority assets of over £175bn, has filed the resolution after Sports Direct has come under fire for its questionable labour practices. The Investor Forum, the new engagement body, is also due to publically rebuke Sports Direct’s corporate governance and working practices after a series of failed attempts to engage with the retailer.

Heaping further pressure on the firm, Legal & General Investment Management (LGIM) has revealed that it will vote against Sports Direct’s chairman for the third consecutive year. Sacha Sadan, Director of Corporate Governance at LGIM, said: “We first voted against the Chairman in 2014 when the share price performance was still strong trading at around £7.00. Today it is trading at around £3.08.” The leading fund manager will also be voting against the re-election of all non-executive directors, saying it “needs a stronger body of independent non-executive directors to ensure the business is run in the interest of all shareholders”. LGIM will also support the labour practices resolution.

Twelve institutional investors in Taiwan have reportedly signed the stewardship principles designed by the Taiwan Stock Exchange (TWSE). They include four major government-led funds – the Chunghwa postal fund, the labor fund, the national development fund and the pension fund. The stewardship principles were launched in June of this year.

Proxy-tracking firm Fund Votes has found that fund manager Vanguard Group has failed to support a single sustainability resolution of the 200 that have been filed since 2015. Barron’s reports that since Fund Votes’ founder Jackie Cook started tracking the largest 42 fund families a dozen years ago, support for environmental resolutions has almost doubled—from 16% to 30% in 2015. However, Vanguard is yet to support one.

Activist investors have launched the fewest new campaigns this year since July 2012, according to a Bloomberg survey of 35 prominent activists, in what could be an indication of difficult conditions for making new investments. Research shows that there have been just 35 activist campaigns launched in 2016 through until July, down from 61 last year, with the projected number that could be expected by the end of the year set at just over 60. Such a downturn would put new campaigns started this year on track to be at its lowest level since 2011, when there were 59 in total.