RI ESG Briefing, December 22: Norges Bank, ORIX, CalPERS, APG, AP7, ESMA

The round-up of the latest ESG news


ORIX Corporation, the Japan-based conglomerate that controls Robeco, has acquired a stake in the U.S.-based start-up UniEnergy Technologies, which develops and manufactures advanced large-scale energy storage systems. ORIX has acquired 10% of the voting rights in the holding company that owns 100% of UET’s stock by purchasing preferred voting shares that the holding company issued through a third-party allocation. ORIX is expanding its energy business via efforts such as establishing an investment fund with the Asian Development Bank and Robeco; it says it plans to “pursue investment in the promising energy markets both in Japan and around the world”.

The California Public Employees’ Retirement System has signed
the Paris Pledge for Action, a commitment to support and implement the Paris Agreement, the global climate change agreement reached at the 21st Conference of the Parties (COP21). The agreement aims to restrict global average temperature rise below the 2 degree Celsius threshold, CalPERS Investment Director of Global Governance, Anne Simpson said, “[W]hile much work needs to be done, the Paris Agreement and associated pledge are a turning point”.

APG, the giant Dutch pension asset manager with $431bn under management, has announced it will join the Climate Bonds Initiative’s Partnership Programme. The Climate Bonds Initiative is an investor-focused not-for-profit promoting large-scale investment in the low-carbon economy, working to mobilise the $100tn bond market for climate change solutions. APG in joining the initiative has committed to support the development of a global market for Climate and Green Bonds.

BPCE, the second-largest banking group in France, launched its first “green bond” issue earlier this month for a total of €300m. Proceeds will be used to finance projects by Natixis Energéco, a Natixis subsidiary specializing in the funding of renewable energy initiatives. The issue was completed successfully with more than 100 investors subscribing for a total of €1.2bn.


The University of California has reportedly said it plans to exit its c.$30m of investments in private prison companies. Reuters, citing university spokeswoman Dianne Klein, said the decision was made by the UC system’s chief investment officer, Jagdeep Singh Bachher after meeting with the Afrikan Black Coalition student group. The university’s endowment is worth $100bn.

The Holy Land Principles, which advocates fair employment practices for US firms with a presence in Israel/Palestine, has announced the filing of nine shareholder resolutions regarding the implementation of the principles for the AGMs of these companies: Cisco; Intel; Coca Cola; Pepsi; FedEx; UPS; GE; GM; McDonald’s. Link. Governance

Norges Bank has decided to end its observation of Alstom, the French industrial group, following a new recommendation from its Council on Ethics. The Ministry of Finance’s decision to put Alstom “under observation” in December 2011 – for four years was based on an assessment of risk of gross corruption in the company’s operations. The observation period was set for four years. The Council on Ethics notes that the risk of future corruption in the company is reduced, and the risk now is probably not higher than in other comparable companies.

Swedish state buffer fund Sjunde AP-fonden (AP7) and its co-lead plaintiffs have reportedly reached a $150m (€138m) settlement with JP Morgan Chase that ends a three-year securities class action relating to the bank’s “London Whale” trading scandal. AP7 was lead plaintiff alongside US public pension funds from the states of Arkansas, Ohio and Oregon, IPE.com reported.

The Pensions and Lifetime Savings Association’s (PLSA) – formerly the UK National Association of Pension Funds – annual Stewardship Survey for 2015 finds that 93% of the 60 responding pension funds believe that ESG issues are material to investment returns. Almost all respondents (98%) agreed that pension funds have stewardship responsibilities, with 37% saying stewardship was regularly discussed at trustee meetings, up from 17% in 2012. Nearly half (47%) said they include specific stewardship criteria in their fund management ‘Requests for Proposals’ (RFPs), but fewer than a third of respondents (29%) said their investment consultants raised stewardship issues with them in advisory discussions.

CalPERS has expanded its online offering of proxy voting decisions made by the fund to now include those for all more than 10,000 listed companies in its portfolio. Previously, the fund proxy voting information for its 300 largest holdings. “Openness is one of CalPERS’ Core Values,” said Ted Eliopoulos, CalPERS Chief Investment Officer. “As a long-term shareowner, our votes are one way we can influence a company’s operations and governance. We want all shareowners to have access to this information.”

The European Securities and Markets Authority (ESMA) has published its Follow-up Report on the development of the ‘Best Practice Principles for Providers of Shareholder Voting Research and Analysis’ (Principles) which looks at the proxy advisory industry’s progress in establishing and following a self-regulatory code of conduct. Overall, ESMA finds that the industry is moving in the right direction but sees room for improvement in some areas.

The European Union’s anti-fraud office (OLAF) is investigating loans granted to under fire German car manufacturer, Volkswagen AG by the European Investment Bank (EIB). The loans, which were already being scrutinised by the EIB itself in the wake of the emissions scandal, were provided to help fund the development of cleaner engines. The probe, of which VW was unaware prior to being reported elsewhere, adds to the long list of investigations the company is facing. Link