RI ESG Briefing, December 21: MUFG, Natixis, Barclays, Big Society Capital, Cyrus Mistry

Environmental

Mitsubishi UFJ Financial Group (MUFG), Siemens Bank, Natixis, Barclays and the UK’s Green Investment Bank have backed a waste-to-energy plant in Wales. Barclays provided an equity bridging loan on the £180m project, while the others were part of a lending consortium. The Green Investment Bank provided a £35m loan. The 18MW project is being developed by Wheelabrator Technologies Inc as part of a public-private partnership with local authorities. It is expected to be completed by the end of 2019.

US-based Hannon Armstrong Sustainable Infrastructure Capital has teamed up with CounterPointe Sustainable Real Estate to work on commercial Property Assessed Clean Energy (PACE) opportunities. PACE is a public initiative in the US to boost energy efficiency and renewable energy in commercial and residential properties by providing the upfront capital to home and business owners, who then repay it through a long-term tax on the property. CounterPointe Sustainable Real Estate is a subsidiary of CounterPointe Energy Solitions, which is an administrator for the initiative in three US states. Hannon Armstrong invests in energy efficiency, wind and solar, and said that the partnership would enable it to ramp up its investment in the PACE market.

The European Investment Bank (EIB) has said it plans to borrow €60bn in 2017 to help it finance projects, many of which will be related to environmental and social targets. The bank had its Operational Plan for 2017-2019 approved last week, allowing it to borrow up to €65bn next year. So far in 2016, the EIB has raised €66.3bn, some of which will be used in 2017. The EIB has a long-established programme for Climate Awareness Bonds, which it is expected to tap next year as part of the €60bn.

Social

UK social investor Big Society Capital has said the UK government should mandate all defined contribution pension schemes in the UK to offer a ‘social fund’ option to employees. It has made the call in light of a current review in the UK on how pension funds can make social investments. In a blog, Camilla Parke, Strategy and Market Development Associate at Big Society Capital, says a ‘social fund’ option would have a catalytic impact on the market.
The Alberta Securities Commission will require listed companies to disclose gender-related information at boards and senior management levels, effective December 31 2016. The announcement comes after a one-month consultation in which the majority of stakeholders who provided feedback were in favour of having more information about women representation at the top of the corporate ladder.Among the disclosures, companies will have to report, on a ‘comply or explain’ basis, information such as: gender policies, nomination committees’ considerations, and representation targets among board members and C-suit executives. The majority of Canada’s provinces have already adopted similar disclosure requirements.

Governance

Dutch listed companies will be expected to comply with a revised version of the Corporate Governance Code, effective from financial year 2017. On December 8, the new version was published with a focus on long-term value creation and company culture featuring among the most important updates. The revision was promoted by a number of stakeholders and coordinated by the Dutch Corporate Governance Code Monitoring Committee, which reports annually on compliance levels with the Code. The last revision of the Code took place in 2008.

Cyrus Mistry, ousted chairman of Tata Sons – the holding company of the Tata Group companies – has launched a Corporate Governance Initiative ahead of resigning from his remaining positions this week. Mistry was booted out of the company in October, and was replaced by his predecessor Ratan Tata. He has contested the decision ever since, and is reported to have said: “the pursuit of good governance and ethical business seem to have caused a serious discomfort in some quarters”. Mistry has now resigned from the boards of six Tata Group companies, but not before creating the governance initiative. “In [the] Tata Code of Conduct, the Code says: ‘We will be fair, honest, transparent and ethical in our conduct; everything we do must stand the test of public scrutiny.’ The Corporate Governance Initiative will help to one day achieve that goal, because as of today, we are not there”, he said.

The Development Bank of Japan (DBJ) has become one of the latest signatories of the UN Principles for Responsible Investment, effective December 12. The Tokyo-based bank, established in 2008, was the result of a merger between two previous national development institutions and its main purpose is the provision of long-term funding. DBJ declared total assets of JPY15,808.9bn ($134bn). Link