RI ESG Briefing, December 3: Norges Bank, Generation IM, Legal & General, GM

Environmental

Researchers at Columbia University in New York have published their first papers assessing water-related risks in the mining industry. The papers were published as part of the Columbia Water Center Project sponsored by Norges Bank. Said the researchers: “There is growing interest from stakeholders for better assessments of the financial risks posed by water-scarcity, the development of general “water risk” reporting tools, better disclosure of water use and related factors, and the creation of more reliable water footprint and accounting frameworks to assess efficiency.” Link

The McKnight Foundation has published a report that looks at its climate investing and grantmaking programs and offer examples of “steps we’ve taken to decarbonize, reinvest, and help markets evolve”. In addition, the report outlines a four-point framework the US foundation has developed that goes beyond impact investing and “leverages our entire endowment to accelerate a low-carbon future”. The document is called The Road Through Paris: Building a Low-Carbon Economy with Investing and Philanthropy.

Generation Investment Management has helped raise $19m (€17.9m) in new equity investment for M-KOPA, a solar power firm active in East Africa. M-KOPA said the money would be used to expand its management team, product range and international operations.

Social

UK-based social investment consultancy Resonance has been awarded “Deal of the Year” at the Social Enterprise UK Awards for arranging the first ever social investment tax relief deal. The deal was between charity FareShare South West, which diverts surplus food from businesses to organisations working with vulnerable people, and a group of local business angels. Since, Resonance and its partner UBS Wealth Management have developed the Resonance Bristol SITR Fund – that invests in social enterprises to dismantle poverty in the local area.

The Generation Foundation has teamed up with the 2° Investing initiative to form a three-year research partnership to study what Bank of England Governor Mark Carney calls “the tragedy of the horizon” – the mismatch between the short-termism that dominates investment decisions and the long-term perspective needed to deal with financial risk. The partnership will publish its first report in early 2016.

Howard Warren Buffet, grandson to investment superstar Warrren Buffet, has launched a new firm described by the New York Times as the Berkshire Hathaway of impact investment. i(x) describes itself as a permanently capitalized holding company for investors that want to create long-term economic growth in combination with social impact. The CEO is Trevor Neilson, formerly Executive Director of the Global Business Coalition created with investment from Bill Gates, George Soros and Ted Turner.h6. Governance

Legal & General Investment Management (LGIM) is calling on the companies it invests in to introduce compulsory cyber audits to protect themselves from attack. According to Reuters, LGIM specially wants firms to monitor information assets as a strategic issue and document the management of the risk through an audit.

LGIM’s 10-strong Corporate Governance team received the Institute of Chartered Secretaries and Administrators (ICSA) inaugural award of ‘Best Investor Engagement’ for 2015 at a ceremony at the Park Lane Hilton Hotel in London on December 1. The award was voted for by the company secretaries of all FTSE350 companies who were asked to nominate the investor or investment manager who has been responsible for the most constructive stewardship engagement with their company in 2015.

General Motors has become a signatory of the United Nations Global Compact, the world’s largest corporate responsibility initiative. The US car giant said it had “analyzed its current policies, processes and practices and found close alignment” with the initiative’s 10 principles. The move follows the departure of rival VW from the initiative in the wake of the emissions scandal.

The New Zealand Stock Exchange NZX is consulting on a new corporate governance code and is asking the extent to which ESG reporting should be a factor. Currently, some companies use the Australian corporate governance code as a framework, while others use ones formed by NZ bodies. The NZX is trying to move to a more unified approach. Submissions are due by January 29 next year.

German industrial giant Robert Bosch has reportedly been accused of conspiring with VW to evade diesel emissions standards. Reuters was citing a class action lawsuit filed in U.S. District Court in Detroit. A company spokeswoman declined to offer an immediate comment on the lawsuit, the news agency said.

The International Corporate Governance Network (ICGN) has responded
to the consultation on Japan’s Stewardship Code and Corporate Governance Code, launched in light of the Toshiba accounting scandal. In a letter to the Council of Experts leading the review, the ICGN says that Japanese companies should have at least a minimum of one-third of independent directors and provide more information during voting season. Elsewhere, Japan’s Financial Service Agency has updated its website with minutes and presentations of the first and second meetings of The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code.