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RI ESG Briefing, August 9: Climate finance, ET Index, VW, LAPFF, OpenOil, ShareAction, LIBOR

The round-up of the latest ESG developments

Environmental

Climate finance totalling $81bn was mobilised for projects funded by the world’s six largest multilateral development banks (MDBs) in 2015. This included $25bn of MDBs’ direct climate finance, combined with a further $56bn. They are the findings of the 2015 Joint Report on Multilateral Development Banks’ Climate Finance, prepared by the Asian Development Bank (ADB) together with MDB partners: the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG), and the World Bank Group (WBG).

ET Index Research, the low carbon index firm that’s co-chaired by former Climate Change Capital chair James Cameron and ex-UK government minister Chris Huhne, has raised £1.13m in seed funding from angel and family office investors. It supplements funding from the EU’s flagship climate change accelerator, Climate KIC, that came at the beginning of 2015. Former Secretary of State for Energy and Climate Change Huhne said: “This successful fund-raising for ET Index puts the company on course to roll out its unique carbon risk factor analysis for equity and bond market investors together with outstanding tools for low-carbon index investing.”

A fund backed by 19 institutional investors has invested in the construction of a £160m biomass project in the UK. Copenhagen Infrastructure II – which is managed by Copenhagen Infrastructure Partners (CIP) – has bought a 27.8MW biomass-fired combined heat and power plant project in Kent in southeast England with Danish engineering firm Burmeister & Wain Scandinavian Contractor.

Social

Just 100 UK companies have paid to sign up to a new voluntary slavery database that was designed to fund an anti-trafficking helpline, according to the Thomson Reuters Foundation, the charitable arm of Thomson Reuters which cited organisers. The report said the number is a “tiny fraction” of around 12,000 firms targeted to join the Transparency in the Supply Chain (TISC) database. TISC lets companies confidentially admit when they find their suppliers using enslaved workers.

OpenOil, a Berlin-based consultancy, has launched Aleph, a new tool that enables government officials, journalists, financial analysts and researchers to search through corporate filings of publicly listed extractive companies across multiple jurisdictions. At launch, users can utilise Aleph to search through more than two million documents, a database that grows in real time as coverage keeps expanding. Documents filed to main mining reporting jurisdictions such as Canada, United States, Australia and South Africa, among others, are indexed and made searchable, with direct links to the originals.h6. Governance

The $4.4bn investor lawsuit mounted against Volkswagen in the wake of the emissions-rigging scandal has been allowed to move forward by a German court. The District Court in Braunschweig, near the auto maker’s headquarters, has said it will now choose one of the 170 individual suits as a pilot case, which as mandated by German law will then be applied to all similar cases, by the end of 2016. The court’s lawyers revealed that they had received 170 individual suits against Volkswagen seeking around €4bn in damages, including cases filed by more than 300 institutional investors including CalPERS and the Arkansas State Highway Employees Retirement System, a $1.4bn pension fund. Link

The UK government and the Local Authority Pension Fund Forum (LAPFF) has set up a cross-parliamentary group tasked with examining the role of local authority pension funds (LGPS) in promoting corporate governance and shareholder activism. The group, chaired by Labour MP for Sheffield South East Clive Betts, will also advise on reforms to the LGPS system – including the pooling of funds and new investment guidelines – and report back to Government about how fund money can be used to generate local growth, housing and infrastructure. Betts said: “Local authority pension funds are off the radar for most parliamentarians, yet their role as pension providers and investors in the UK in new British wealth funds is critical”. Home page

Nobel Prize-winning economist Joseph Stiglitz and Swiss anti-corruption expert Mark Pieth have resigned from the seven-member Panama Papers commission because of government interference, according to reports. The panel was set up by Panama’s government in April 2016 to improve transparency in the wake of the Panama Papers offshore tax evasion scandal and the BBC quoted Pieth as saying officials told him that they would have final say on whether to publish the group’s findings.

Campaign group ShareAction has welcomed a shareholder resolution filed at controversial clothing retailer Sports Direct, calling for an independent review of the company’s human capital management strategy. The company has recommended that shareholders oppose the resolution, which was filed with the support of Unite the union. Lisa Nathan, Campaigns Manager at ShareAction, said: “Investors in Sports Direct should ask themselves whether an independent review would help to address these concerns, and if so then they should support the resolution.”

New York Attorney General Eric Schneiderman has announced a $100m, 44-state settlement with Barclays Bank PLC and Barclays Capital Inc. for “fraudulent and anticompetitive” conduct involving the manipulation of U.S. Dollar (USD) LIBOR (the London Interbank Offered Rate) and other benchmark interest rates. Schneiderman said in a statement that Barclays is the first of several USDLIBOR-setting panel banks under investigation by the State Attorneys General to resolve the claims against it, and that Barclays has cooperated with the investigation from the outset.