RI ESG Briefing August 6: SEC pay ratio, Italy divestment, Standard Chartered, Permira

The round-up of the latest ESG news

Environmental

Clean power firm TerraForm Global began trading on the Nasdaq Stock market on July 31. Bethesda, Maryland-based TerraForm owns an operating portfolio of wind, solar and hydroelectricity assets across China, Brazil, India, South Africa, Southeast Asia and Latin America. The firm trades under the GLBL ticker. Announcement

Two US banks have teamed up to provide financing for a 71MW wind and solar project in Arizona. U.S. Bancorp and Zions Bank said the renewable-energy tax-equity syndication agreement would provide financing for the $200m Red Horse 2 project near Tucson, owned by an affiliate of D. E. Shaw Renewable Investments LLC. U.S. Bancorp launched its new renewable-energy investment syndication earlier this year, allowing first-time and experienced investors to participate in the renewable-energy tax-equity market. With this agreement, Zions Bank is co-investing with U.S. Bancorp. Announcement

A fossil fuel divestment campaign has begun in Italy. “As the first step for the campaign, in collaboration with 350.org, Coordinamento Power Shift Italia, The Climate Reality Project, Viração and FIMA, we brought the message of Divest the Vatican… to the Vatican!” says Riccardo Rossella of the Italian Climate Network in a blog posting.

Social

Hirtle Callaghan, the US ‘Outsourced Chief Investment Officer’ firm with $26bn of family, endowment, foundation, healthcare and pension assets under management, has launched a new investment approach that combines its ‘Engineered Style Portfolios’ with ESG integration. It said the new approach is designed to offset the challenges of traditional socially responsible investment and comes in response to client demand. “Our conflict-free structure allows us to work closely with our clients to engineer portfolios that account for ESG leadership while actually decreasing cost,” said Garrett Wilson, ESG specialist at Hirtle Callaghan.

Campaign group Greenpeace has published a report detailing the key risks for Standard Chartered bank in its role as lead advisor on the controversial Carmichael coal mine in Australia. The project would be one of the biggest mines in the world and requires construction of one of the world’s largest coal ports in the Great Barrier Reef. This briefing outlines the potential impact of the project on the Great Barrier Reef – a UNESCO World Heritage Site – and the key risks for Standard Chartered from its involvement. Link. Governance

US SIF: the Forum for Sustainable and Responsible Investment, has applauded the new pay ratio disclosure rule from the Securities and Exchange Commission (SEC). Under the rule, listed companies would be mandated to disclose (from 2017) the median of the annual total compensation of all employees except the CEO, the annual total compensation of the CEO and the ratio of the two amounts. US SIF’s Chief Executive Lisa Woll said her organization had urged the SEC to enact this rule since the Dodd-Frank Act became law five years ago. “We believe that the rule strikes an appropriate balance between providing useful information to investors and providing issuers with flexibility in its implementation.” The US union the Teamsters called it a “victory for corporate disclosure”. Link

A majority (53%) of shareholders in Airgas, the New York-listed gas group, voting in yesterday’s director elections withheld support from three independent board members standing for re-election. Excluding the shares held by board members and executive officers, the “no” vote was 62% of shares cast or more than 51% of total outstanding shares, the Teamsters said. “Airgas investors have lost confidence in the leadership of this company,” said Ken Hall, General Secretary-Treasurer of the International Brotherhood of Teamsters. “These directors should resign from the board immediately to make way for new directors who will be responsive and accountable to the shareholders they are elected to represent.”

UK asset management firm Aviva Investors has reportedly said it opposes a $2.3bn plan by mining giant Vedanta to buy out minority shareholders in Cairn India. Reuters quoted the firm – which has a 4.3% stake in Cairn Energy – as saying the deal failed to deliver sufficient value. “As long-term investors, we believe that the timing of this deal is opportunistic and materially undervalues Cairn India, its current reserves and future prospects,” it quoted Aviva as saying in a statement.

Dutch pension investment giant PGGM has reportedly demanded full fee disclosure from private equity firms. Financial News said the $204bn investor would cease investing in external managers, including private equity houses, that do not fully disclose their fees. It’s the latest show of concerns that have been growing, especially in the US, the report added. Link

Permira, the €25bn private equity firm, is reportedly upping its investments in Japan as a result of government moves to give greater power to shareholders. The Australian Financial Review quoted the firm’s new Japan head Ryotaro Fujii as saying in an interview: “With the introduction of the stewardship code and corporate governance code, the management of companies can now look at things through shareholders’ eyes.”