RI ESG Briefing, January 3: Protesters target Dutch giant ABP over nuclear plant stake

Environmental

The $62bn Alaska Permanent Fund’s Trustees have reportedly “requested a meeting to talk about the sustainability and ethical impacts of its investments”, following pressure from campaign groups over its $5bn fossil fuel holdings. This is the first time the fund, which holds companies like Halliburton, Exxon, BP, and Tesoro, has agreed to discuss the issue. The fund was also asked by the campaigners to provide a performance history of its fossil fuels holdings but the fund is reported as saying it couldn’t track that performance data.

The World Bank, the world’s largest multilateral development bank, has announced a new partnership with the Global Covenant of Mayors to provide technical and financial assistance to 150 cities globally “undertaking aggressive climate action programs”. It will lend $4.5bn over the next three years under the umbrella of the its City Resilience Program (CRP), and will draw on resources from International Finance Corporation and Multilateral Investment Guarantee Agency.

*Influencemap, the UK*-based climate policy watchdog, has found that 44 of the 50 most influential industry groups adopt an “oppositional” lobbying position to climate change policy. In the US, it highlights the Chamber of Commerce, the National Association of Manufacturers (NAM), and the American Legislative Exchange Council (ALEC) as “wielding huge, negative influence” on the development of “international, Federal and US state level climate policy over the last few years”. In Europe, it names the European Chemical Industry Council (CEFIC), the European Automobile Manufacturers Association (ACEA), and BusinessEurope as the three most powerful lobbying groups.

Macquarie owned Green Investment Group (GIG) has entered into a “strategic partnership” with US sustainable waste and energy solutions provider Covanta to develop, fund, and own “Energy-from-Waste” projects in Ireland and the UK. The partnership will be structured as a 50:50 joint venture and will see the GIG initially invest €136m in Covanta’s Dublin-based project. Green Investment Group Limited – formerly the UK Government’s Green Investment Bank – was sold to Macquarie in the Summer for £2.3bn.

Campaign group Divest Hackney has blasted Hackney Council after it reportedly discovered the London authority’s fossil fuel investments have risen almost 80% in two years – jumping from £42m in 2015 to £75m in 2017. The group dubbed the rise “destructive and reckless”. A spokesperson for the Council is quoted as saying it has “reduced the number of fossil fuel stocks owned through its active mandates by 57% since January 2016”, and that the rise is due to the value of its existing stock going up.

Social

French bank BNP Paribas has partnered with the United Nations Environment Programme to bring $10bn in private capital to sustainable projects in emerging countries by 2025. The Memorandum of Understanding between the partners was signed at French President Macron’s One Planet Summit. They will now work together to identify suitable commercial projects with measurable environmental and social impact.

The Pensions and Lifetime Savings Association (PLSA), the UK’s main pensions industry body, has “welcomed” the UK Government’s interim response to the Law Commission’s report on pension funds and social investment. Luke Hildyard, Policy Lead: Stewardship and Corporate Governance, at the Association said: “It is an extremely important issue and there is compelling evidence that Environmental, Social and Governance considerations have a big impact on investment returns”.

Food giants Thai Union Group and Nestlé – both of which have experienced supply chain human rights scandals in the past – have jointly launched a “demonstration boat” to promote the human rights of workers in the Thai fishing industry.h6. Governance

Dutch civil service pension giant ABP has faced protests against its investment in a nuclear power plant across the border in Belgium. The protesters at its headquarters in Heerlen called for it to withdraw from utilities firm Engie, which operates the Tihange plant. ABP said it was better for it to be a “critical shareholder” (‘kritische aandeelhouder’). If it sold its shares it loses its influence with Engie, it said.

Two individual shareholder associations have reportedly called on UK-based banking group RBS to submit a resolution at its annual meeting on setting up a new shareholder committee. The initial demands were rejected on legal grounds by the bank last year, the Financial Times said – adding that the shareholder representatives have now adjusted their proposals to address the concerns.

US oil giant Exxon is set to lift its ban on shareholders meeting members of its board, a move that has been welcomed by investors, the FT reports. Under new CEO Darren Woods the company would now “where appropriate” engage directly with “key shareholders” – adding that it understood the importance of keeping investors informed about its business. The announcement comes in the wake of its decision to implement a shareholder resolution on climate disclosure filed by the Church Commissioners and the New York State Common Retirement Fund.

The Convention on Business Integrity (CBi) and the Nigerian Stock Exchange have announced the inauguration of the Steering Board of the Corporate Governance Rating System, which held its maiden meeting on December 12 last year. The Steering Board is the governing body of the CGRS, defining its scope, guiding its development and its ultimate authority.

Shareholder advocacy group As You Sow has re-filed for 2018 a resolution with fast food giant McDonald urging it to assess the environmental impact of its use of harmful polystyrene in beverage cups and food trays. The same proposal was voted on by shareholders in 2017 and was supported by nearly one-third of shares voted.

Index firm FTSE Russell has launched a new sustainability index for the Taiwanese market. The FTSE4Good TIP Taiwan ESG Index, which has been created in collaboration with the Taiwan Stock Exchange’s wholly-owned subsidiary, Taiwan Index Plus Corp., is the first domestic Taiwan benchmark developed using FTSE ESG Ratings and data model. FTSE claims that the index has been created to meet asset owners’ growing demand, both in Asia and globally, to integrate ESG considerations into their investment strategies.

Broadridge Financial Solutions has completed its acquisition of Morningstar’s board consulting services business. It said the deal strengthens its offering to the investment management industry; terms were not disclosed.

The Luxembourg Stock Exchange has added a new principle compelling listed companies to disclose their corporate social responsibility (CSR) policy, as part of a year-long review of its Corporate Governance Principles. The exchange now claims its “revised Decalogue” is now “one of the most advanced corporate governance documents in terms of mandatory CSR-commitment of listed companies”.

The Climate Disclosure Standards Board (CDSB) is set to launch an online platform to support companies in implementing the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The TCFD Knowledge Hub, which will provide technical guidance, tools, insights, and case studies, will formally launch next Spring. CDSB is an international consortium of business and environmental NGOs, committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital.

US renewables investor Hannon Armstrong and Taiwanese bank E.SUN Commercial Bank have joined the likes of Aviva, Iberdrola, and Unilever in committing to implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in the next three years. There are now 14 companies committed to the Climate Disclosure Standards Board (CDSB) TCFD focused initiative.