Environmental
Norway’s Government Pension Fund (GPFG), which has $870bn (€701bn) in assets, plans on investing more in in listed green technology companies, according to CEO Yngve Slyngstad. Speaking in Geneva recently, he said that over the short-term, the fund would bring its exposures to such companies to 1% of total assets. Currently, the sovereign wealth fund is said to have $4.5bn invested in the space. “We’re convinced that we will find profitable investment opportunities, and we’re convinced this part of the portfolio will be a long-term outperformer,” Slyngstad was quoted by Bloomberg as saying. The opportunities being looked at are in the renewable, waste management and energy storage sectors.
The Pension Protection Fund, the UK pension lifeboat scheme, has indicated that it intends to award investment management contracts – which may “focus on sustainable investment opportunities” – across a range of asset classes. They include: global equities and bonds; illiquid assets; private equity; advisory services; systems; alternative credit; infrastructure; and passive managers. “There may also be further tender exercises for other asset classes and services,” the PPF said in a tender notice. And, as part of its procurement, it will assess managers’ ability to comply with its RI policies.
Gothaer, a German midsize insurer with €25bn in assets, has placed €150m in capital with German renewables firm Capital Stage in order for the latter to acquire solar parks in Germany, France and Italy. Founded in 2009, Hamburg-based Capital Stage owns and operates wind and solar parks with a combined capacity of 313MW. With the fresh capital from Gothaer, Capital Stage says it should double the power capacity of its portfolio in the near term as a result of finding photovoltaic opportunities in the three European countries. Gothaer announced last July that it planned to allocate between €200m and €300m to renewable energy in 2014 alone.
Social
US private equity firm Cerberus has reportedly not divested its holdings in the Freedom Group, the maker of the Bushmaster rifle used in the Sandy Hook massacre in Connecticut just under two years ago, despite being urged to do so by client investor the California pension giant CalSTRS. Cerberus declined comment on the Fortune report. But Fortune quoted CalSTRS spokesman Ricardo Duran as saying: “CalSTRS continues to push our partner, Cerberus, to sell holdings of Remington (a unit of the Freedom Group) from the investment pool in which CalSTRS is a limited partner. Despite this, Cerberus has not been able to sell the holdings, or to find a way out of Remington to investors like CalSTRS.”
New research from campaign group BankTrack has found that global banks are making “slow progress” in implementing human rights standards, and are failing to live up to their responsibilities completely in some areas. The findings are presented in a new report titled Banking with Principles? which assesses 32 of the largest global banks against the UN Guiding Principles on Business and Human Rights, which set out the responsibilities of businesses to respect fundamental human freedoms. The report shows that, while some progress has been made since the Principles were launched in mid-2011, “major gaps remain”.
Social impact bonds (SIBs) in the UK have a limited evidence base, particularly in terms of their effectiveness, but early signs from key stakeholders such as investors have been broadly positive, according to a report commissioned by the Big Lottery Fund, a major UK grant-maker funded by proceeds from the National Lottery. Social impact bonds: the state of play was published by research and consultation organisations Ecorys UK and ATQ Consultants. The report finds SIBs tend to be funded by social investors rather than institutions like in the US and the Netherlands where they have tended to be constructed in order to attract institutional investment by de-risking their investment.h6. Governance
The VBDO, the Dutch Association of investors for sustainable development, has partnered with Rabobank and Philips on a webinar to discuss environmental, social and governance topics at the electronics giant. The company will be represented by CEO Frans van Houten and Henk de Bruin, its Global Head of Sustainability. The one-hour event, on December 17, will include specific ESG “hot” topics.
Shareholder pressure forced oil and gas group BG to cut the £25m “golden hello” pay deal for new CEO Helge Lund. According to media reports, shareholders warned they would vote down the package later this month. The Guardian reported that the firm’s board decided on November 30 to cut the award – avoiding the need for a formal shareholder vote on December 15, a meeting which had been convened because the original award of shares breached BG’s own pay limits. Legal & General Investment Management’s Director of Corporate Governance Sacha Sadan was quoted as saying LGIM was “encouraged” to see BG responding positively to shareholders’ concerns: “As long-term engaged investors we look forward to the new CEO joining and creating shareholder value for all.”
South Korea’s Financial Services Commission (FSC) has announced a range of measures to revitalize its stock market, including encouraging the participation of pension funds and the introduction of a Stewardship Code next year. The FSC plans a three-pronged approach to boost its stock market – allowing more listings of different financial products and encouraging a more active role of institutional investors; enhancing efficiency of the market infrastructure and trading system; and strengthening investor protection and trust by better disclosure rules. As a result of the measures, Korea Post, a government-run pension fund, will be able to invest up to 20% of its assets in equities, up from the current cap of 10%.
The Japanese Financial Services Agency (FSA) has revealed its draft principles for a new Governance Code. It includes guidelines aimed at sustainable growth of shareholder value, ESG issues and diversity. Further, the draft principles say companies should have at least two independent outsiders on their boards or explain why they haven’t; and that companies should positively try to disclose non-financial information such as risk factors and corporate governance. The draft code was unveiled at the seventh meeting of a group picked to discuss the details of the new Governance Code. The 13-member panel, chaired by Professor Kazuhito Ikeo of Tokyo’s Keio University, has been meeting since August.
Russian gas giant Gazprom is amending its Corporate Governance code to meet standards in the revised national code approved by the country’s Central Bank in March. Russia adopted a Code of Corporate Governance in 2002 that was updated earlier this year. The new Code includes provisions on shareholder rights, such as holding meetings with shareholders and creating a dividend policy. Also, board member independence criteria has been substantially expanded and clarified, and there is revised guidance on remuneration. The Code’s recommendations are primarily aimed at public companies and major government-controlled companies. Link
Faith group the Sisters of Charity of St. Elizabeth in New Jersey has reportedly called on Bank of America to separate the chairman and CEO roles held by Brian Moynihan. The Charlotte Observer reported that the Sisters of Charity’s request came ahead of a deadline to submit proposals for the bank’s next AGM, to be held in the spring. Earlier, CalSTRS and New York City Comptroller Scott Stringer wrote to the bank on a similar issue.
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