RI ESG Briefing, August 7: Massachusetts pension fund launches Barrick Gold lawsuit

The round-up of environmental, social and governance news

Environmental

A Luxembourg investment fund backed by European insurers and pension funds has bought four solar power plants in Sardinia, Italy. IKAV Global Energy, an investment arm of the Luxembourg Investment Fund IKAV SICAV FIS, has bought the 7.87MW portfolio from Norway-based developer Renewable Energy Corporation (REC). IKAV’s investment advisor is Hamburg-based ecoprime GmbH.

The Asset Owners Disclosure Project, which seeks investor transparency on climate exposure, says a new report from the Global Investor Coalition this week suffers from a “data and credibility deficit”. The coalition, comprising regional investor climate bodies, reported on progress by leading investors to manage climate risk and was covered in RI. But the AODP says it is a “smokescreen that is hiding some of the real barriers to better long term investment”. The AODP’s 2013 information request was issued in June and will report on the top 1000 asset owners in December.

China’s state-owned Longyung Power, the country’s biggest producer of wind power, has issued a three-year, $300m bond, according to the Climate Bonds Initiative citing a report in Finance Asia. The bond missed the target of $350m and the buyers were 43% banks, 45% fund managers, 6% central banks and sovereign wealth funds and insurance funds, private banks 4% and insurance and pension funds only 2%.

Social

The Ecumenical Council for Corporate Responsibility (ECCR), the church-based investor coalition, is planning to debate the ethics of church investment as part of the UK’s National Ethical Investment Week (NEIW) on October 17. The topic “Church investment: witness or whitewash?” will be discussed by panellists from the Church Investors Group, Operation Noah and Methodist Tax Justice Network at Friends House, Euston Road, London.h6. Governance

The City of Brockton Retirement System, the approximately $300m fund that is one of 106 contributory retirement systems in Massachusetts, has launched a securities class action accusing Canadian mining giant Barrick Gold of misleading investors about potential cost and environmental hurdles at its huge Pascua-Lama project in Chile. The case was filed in New York Southern District Court by law firm Labaton Sucharow and no judge has been assigned yet. A company spokesman has been quoted saying Barrick disputes the allegations, and intends to defend the lawsuit vigorously.

It has emerged that state-owned German development bank KfW not only pays its six management board members between €500,000 and €1m annually, but offers them a number of perks, including a limousine and driver, accommodation and generous healthcare subsidies. The revelations came in a study commissioned by the German economics ministry, obtained by the Bild Zeitung tabloid. KfW chief executive Ulrich Schröder was by far the best paid of the six, earning €1.028m in 2012.

Sustainable Investing for Institutional Investors is a review of the field by Mirjam Staub-Bisang, founding Partner at Zurich-based boutique Independent Capital Management. Included in the book is a series of case studies featuring a range of investors such as the Central Church Fund (Finland), Government Pension Fund Global (Norway), Nest Sammelstiftung (Switzerland), PGGM (Netherlands), PREVI (Brazil), VBV-Pensionskasse (Austria), VicSuper (Australia). “A must read for investors engaged in responsible investment,” says Wolfgang Engshuber, Chairman of the Principles of Responsible Investment. Link

IVBN, the Association of Institutional Property Investors in the Netherlands, whose members include large pension funds, insurance companies, banks and real estate firms, has joined the Global Real Estate Sustainability Benchmark (GRESB), the industry body committed to assessing the sustainability of real estate portfolios globally. Other recent joiners include $140bn real estate group Townsend, fund firm Robeco, Triodos Real Estate and CBRE Global Investors. GRESB