RI ESG Briefing, December 11: Climate Bonds Initiative publishes full listing of green bonds

The round-up of the latest environmental, social and governance news

Environmental

The Climate Bonds Initiative, the not-for-profit environmental bonds body, has published its full listing of labelled green bonds for the first time as part of an effort to promote greater transparency in the green bonds market, a market that has trebled in size over the past year. A key feature is that ‘second party opinion’ information has been embedded into the list “to make it easier for investors and stakeholders” to find them. The list is available here.

More investors have signed up to the ‘Montreal Pledge’ that was launched at the PRI in Person event in October. It commits investors to measuring and disclosing the carbon footprint of their portfolios annually. From an initial group of backers including major investors such as PGGM Investments, the California Public Employees Retirement System (CalPERS) and France’s ERAFP, the number of signatories has now risen to 22. New signatories include Pensions Caixa 30, Öhman Fonder, Australian Ethical Investment, DoubleDividend, Stichting Pensioenfonds Werk en (re)Integratie (PWRI), Folksam, HESTA and Co-operators Group.

Fossil Free Indexes, the new US-based research company, has found that the top 20 public tar sands companies ranked by the carbon emissions embedded in their tar sands reserves have increased their potential climate-changing carbon dioxide emissions by more than five times within a decade. The finding comes from its Carbon Underground Tar Sands 20, a new ranking of the 20 public fossil fuel companies with the highest potential carbon dioxide emissions from tar sands reserves. The list uses the same methodology as FFI’s flagship Carbon Underground 200, which ranks the top 200 public coal, oil and gas companies by their potential carbon emissions calculated from reported reserves.

Social

A government-sponsored inquiry into Australia’s financial system has recommended that clearer guidance be provided to superannuation trustees on the appropriateness of impact investment by the Australian Prudential Regulation Authority. The Financial Services Inquiry, chaired by former Commonwealth Bank head David Murray, said it saw merit in government facilitating the impact investment market. Murray also called on the government to amend the law to allow investors to access wholesale offerings for social impact bonds.

A new report called ‘Dirty Profits’ purports to lift the lid on violations of internationally established norms and standards by major companies. It is a joint project by civil society organisations, with research and information provided by over 30 authors from 10 countries. It investigates 25 controversial companies that in 2013 had a joint revenue of approximately €4.2trn and profits of €450bn. Some of the firms selected appear on investor exclusion lists while others either do not comply with international or national law, or face serious allegations by the media or civil society. “It is apparent that human rights violations, corruption, exploitation and environmental and climate destruction still form part of the business models of multinational corporations and their financial investors,” said Thomas Kuechenmeister of the NGO, Facing Finance. Link

Martin Horwood, a member of the junior partner in the UK government, the Liberal Democrats, and vice-chair of Parliament’s responsible investment group, is backing a draft amendment to the Pension Schemes Bill that would compel pension providers to give scheme members information on their investments, such as how investments have been selected. Money Marketing reports that UK campaign charity ShareAction has prepared the amendment.h6. Governance

The Universities Superannuation Scheme (USS), the UK pension fund for academic staff, is to survey beneficiaries about its approach to investment after being petitioned by over 3,200 of its members. The ‘Listen to USS!’ campaign was organised by campaign group ShareAction, and argued that in light of the Law Commission’s recent report on fiduciary duties the pension scheme could consider ESG matters in investments and divest for certain sectors if scheme members were in support. ShareAction Chief Executive Catherine Howarth says: “It’s a real vindication of pension scheme members speaking up about their views, that USS has listened to their concerns and agreed to conduct a survey of members views on non-financial factors.”

Nearly 40% of shareholder proposals submitted at Russell 3000 companies that held annual meetings during the first half of 2014 were related to social and environmental policy issues, according to US-based business membership and research association the Conference Board. “Political spending and climate change, key topics during the 2014 proxy season, are expected to feature heavily again in 2015 shareholder proposals,” it adds. Its new report Shareholder Proposals on Social and Environmental Issues reviews the content of the social and environmental proposals voted on most frequently by shareholders of Russell 3000 companies, including the topics that received the highest average shareholder support. It also provides examples of proposal text, sponsor supporting statements, board responses, and related corporate disclosure.

Christopher Clark, Chairman of PAO Severstal, a steel mining company, has won the Russian corporate governance award for the second year running. The awards ceremony was hosted by the Independent Directors Association, the Russian Union of Industrialists and Entrepreneurs, The Moscow Stock Exchange, PwC and OAO Sberbank. The award recognizes the contributions of directors to the development of corporate governance in Russian companies. Link

Chartered Secretaries New Zealand Inc has changed its name to Governance New Zealand to reflect the growing importance of corporate governance in New Zealand Business. Linda Noble, Chief Executive, Governance New Zealand, told Voxy that the growing sophistication and maturity of New Zealand business is putting increasing emphasis on good governance. Governance New Zealand is the New Zealand Division of the Institute of Chartered Secretaries and Administrators established as a professional body by Royal Charter in 1902.

Campaign groups the Environmental Paper Network and BankTrack say they have written to 26 banks to express their concerns regarding the pulp and paper companies Asia Pacific Resources Limited (APRIL), Toba Pulp Lestari (TPL) and their sister companies under the conglomerate Royal Golden Eagle Group (RGE), due to their involvement what is claimed to be “large scale deforestation and social conflicts”. “Research has demonstrated that these companies are involved in illegalities under Indonesian law, under Chinese banking regulations and under international norms,” the groups say. Among the banks contacted are ABN Amro, Barclays, BNP Paribas, Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs and HSBC.