Return to search

RI ESG Briefing, December 15: Investment Association, FRC, SunEdison, Finland SIB, UNEP

The round-up of the latest ESG developments

Environmental

The $20bn San Francisco Employees’ Retirement System fund reportedly plans to divest all of its coal holdings and reinvest the $21m in renewable energy. The retirement fund will divest its holdings in BHP Billiton, Rio Tinto, Vale, Black Hills, Consol Energy, Glencore, Alpha Natural Resources and SunCoke Energy Partners. Board member Victor Makras reportedly also stated his intention to “transfer the half a billion [dollars] in dirty energy investment” currently held by the fund “into clean energy investments”.

The Sustainable Investing Coalition, a partnership comprised of investment advisory firms; As You Sow, Boston Common Asset Management, and the Investor Environmental Health Network (IEHN), are set to release a third annual fracking scorecard on December 17. The report scores 30 major oil and gas companies operating in the U.S, including Exxon, BP, Chevron, and BHP Billiton, on their disclosure to investors about management of key risks associated with hydraulic fracturing operations, this year’s report includes a new focus on methane leakage. A replay of the event will be available here.

Twenty-six Members of Parliament across five political parties in the UK have called on their pension scheme, the £500m Parliamentary Contributory Pension Fund, to divest from fossil fuels, according to reports. The motion has received the backing of several high-profile politicians, including Caroline Lucas, a Green party politician and its only MP, who also filed a motion in September urging the trustees of to evaluate the risk of its investments in high-carbon industries.

Social

Finland has reportedly launched a social impact bond to help refugees. The Finnish Ministry of Employment and the Economy in cooperation with Sitra, the Finnish Innovation Fund, has introduced a three-year pilot aiming to employ immigrants. The project started in the spring, but was made public last month. The investors are the Me-säätiö foundation, Sitra and a private investor. Link

Climate Change and Human Rights is a new report from the United Nations Environment Programme (UNEP) on the links between human rights law and climate change. The report was developed by UNEP in cooperation with the Sabin Center for Climate Change Law at Columbia Law School and highlights the need for “greater ambition” in climate change actions and targets in order to safeguard human rights.

UK-based sustainable and impact investment manager Bridges Ventures has released its annual impact report. Key milestones include closing its £212m Property Alternatives Fund III and seeing a number of exits from its growth, property and social sector funds.h6. Governance

The Financial Reporting Council, the UK watchdog, says it will introduce public “tiering” of signatories to the Stewardship Code in July 2016 to improve reporting against the principles of the Code and assist investors. Improved reporting, the FRC says, will help asset owners judge how well their fund manager is delivering on their commitments under the Stewardship Code; help those who value engagement to choose the right manager; and in consequence should provide a market incentive in support of engagement.

The Investment Association, the UK fund management body formerly known as the Investment Management Association, has announced a revamp into three core divisions focused on “member firms, their products and services and investments and capital markets”. The third of them is ‘Sustainable Investments and Capital Markets’. The changes further integrate the Investment Affairs division, which moved to the Investment Association from the Association of British Insurers (ABI) in 2014.

Shareholder class action law firm Kessler Topaz Meltzer & Check has launched an action against SunEdison, the US developer of solar and wind power plants. The complaint alleges that the defendants “misled investors” by creating the picture that SunEdison had the “financial wherewithal” to sustain continued growth.

US-based mutual fund giant Franklin Templeton has unsuccessfully challenged a shareholder proposal submitted by Boston-based investment management firm, Zevin Asset Management, requesting that the mutual fund “assess any incongruities” in its proxy voting practices relating to climate change, and it will now feature on a proxy ballot – the decision was made by the U.S. Securities and Exchange Commission (SEC).

Next year will be when environmental, social and governance (ESG) factors “move centre stage for many investors and be seen as a driver for long-term value creation”. That’s the view of Philip Saunders, Co-Head of Multi Asset at South Africa-based asset manager Investec.

The New York Stock Exchange’s Governance Services arm has launched FORGE (the Future of Responsibility Governance and Ethics) to support companies and boards navigate the shifting economic, business and regulatory landscape. It’s a quarterly forum of executives, directors and ‘industry influencers’ that aims to produce actionable insights and meaningful data. Link

The Interfaith Center on Corporate Responsibility (ICCR), the US advocacy group, is calling for the fair treatment of workers in US poultry processing plants. According to an article by the ICCR’s Program Director for Strategic Initiatives Nadira Narine the issue warrants concern. Citing a report from Oxfam entitled ‘Lives on the Line: The Human Cost of Cheap Chicken’, she said: “We are concerned about the enormous societal consequences of the industry as well as the risks it poses for business.”