RI ESG Briefing, Feb. 14: European markets body issues feedback on materiality

Environmental

Andra AP-fonden, the SEK241bn (€28bn), the second Swish state buffer fund known as AP2, may increase its agricultural and timberland investments, according to a report on IPE.com citing the fund’s chief investment strategist Tomas Franzén. He was quoted saying agriculture and timber is probably a better portfolio diversifier than real estate.

Low Carbon Accelerator (LCA), the UK-listed clean investment vehicle, has run into another problem as it tries to complete its planned sale to Sterling Planet. It says the first payment from Sterling Planet, due on February 1, has been delayed. Discussions are taking place “and a further announcement will be made as soon as possible”.

Social

Triodos Bank in the UK is currently promoting a five-year £10m (€11.6m) bond Issue for charity client Golden Lane Housing (GLH), which it says could be the largest charity bond issue ever launched in the UK. Triodos first supported Mencap subsidiary GLH in 2003 with the UK’s first ever charity bond issue which raised £1.8m from over 550 investors. The closing date is April 30.

French cooperative bank, Crédit Coopératif has become the 21st member of the Global Alliance for Banking on Values, the sustainable banking initiative. Crédit Coopératif is a pioneer of sustainable finance, offering the largest range of ethical banking products and investments in France. It has assets of €14bn.

Asset management house RobecoSAM is likely to be sold by parent firm Rabobank to Japan-based financial services firm Orix, according to reports. An announcement on the $3bn deal could come as early as next week, the Wall Street Journal reported, citing “people close to the discussions”.h6. Governance

The European Securities and Markets Authority (ESMA) has published its ‘feedback statement’ on materiality in financial reporting. It follows a November 2011 Consultation Paper and a workshop in 2012. ESMA said: “A majority of respondents considered that the concept of materiality is generally well understood, but many respondents expressed the view that there is diversity in application. In particular, user representatives signalled that they see a problem with how materiality is understood and applied.” Among respondents were the Association of British Insurers, the Corporate Reporting Users’ Forum, Dutch governance body Eumedion and Hermes Equity Ownership Services.

The European Commission today (February 14) formally proposed a financial trading tax (FTT) in 11 European Union member states to raise up to €35bn a year. The FTT would apply from next January. EU Tax Commissioner Algirdas Semeta said the EU’s financial sector was €18bn “under-taxed”. Pension funds would come under the scope of the FTT but their costs would be “extremely limited” with low turnover.

In an open letter to Commission President José Manuel Barroso earlier this month, Noël Amenc, Professor of Finance at EDHEC Business School, reiterated his opposition to the FTT. Amenc says the arguments in support of the FTT as a measure to reduce volatility “are, at best, mixed”. The tax, he says, “faces serious implementation challenges”. Link

Female representation on the boards of US companies is increasing, according to executive pay research firm Equilar’s 2013 Compensation & Governance Outlook Report. In 2011, 76% of companies in the S&P 1500 had one or more female board member. The percentage of boards with no female directors fell from 29% to 24% between 2009 and 2011.