RI ESG Briefing, February 11: UK’s church-backed responsible credit union launches

Environmental

California senate leader Kevin de Leon has confirmed he is introducing a bill calling on the state’s two giant pension funds CalPERS and CalSTRS to exit all their coal holdings, the Guardian reported. It said former US Vice President Al Gore spoke to the CalSTRS board in Sacramento last Friday. De Leon was quoted saying by the paper: “Our state’s largest pension funds also need to keep their eyes on the future.”

The University of British Columbia (UBC) faculty has voted in favour (by 62%) of completely divesting from fossil fuels, according to press reports. The UBC has around 10% of its C$1.2bn (€840m), endowment invested in oil, gas and coal stocks. It follows a separate referendum of students whose outcome was 4-to-1 in support of divestment. The issue will now go the UBC’s board of governors. “Students have spoken. Faculty have spoken. It’s time for UBC to act,” forestry professor George Hoberg was quoted as saying. Link

Trillium Asset Management, the US SRI firm, says it has withdrawn its shareholder proposal at 3M, the New York-listed industrial group, following a commitment from the company that it will set quantitative goals for the sourcing and/or production of renewable energy. “By making this commitment, 3M is demonstrating a proactive approach to reducing exposure to volatile energy prices,” said Brianna Murphy, Trillium’s Vice President Shareholder Advocacy and Corporate Engagement.

DEG, a subsidiary of German development bank KfW, has reported a slight uptick in the finance it provides to companies investing in developing countries. Last year it provided them with €1.47bn against €1.45bn in 2013. €460m (2013: €314m) was allocated to infrastructure investments like renewable energy, health care and transport. It means 4GW of green energy is being produced, or enough to supply 5.5m households with power. Announcement (German)

Social

The Churches Mutual Credit Union Ltd. (CMCU), Archbishop of Canterbury Justin Welby’s plan to promote access to responsible credit and savings, has been launched. Welby joined the Moderator of the General Assembly of the Church of Scotland, the Rt Rev John Chalmers and the President of the Methodist Conference, The Rev Ken Howcroft, to unveil the credit union, which will offer a range of savings and loan products. Initially, members will be able to invest in the ‘Founder Member’s Bond’. In “due course” ISAs (Individual Savings Accounts) will be offered. Link

Faith-based investing group the Interfaith Center on Corporate Responsibility (ICCR) is reportedly engaging with banking group Wells Fargo on internal standards. The Wall Street Journal reported the ICCR, which has also had similar successful dialogues with other US banks, also plans talks with Citi in the coming months. The Journal was citing ICCR chairman Seamus Finnh6. Governance

Keith Higgins, Director at the Securities and Exchange Commission’s Division of Corporation Finance has explored the current controversy about shareholder resolutions at company annual meetings in a speech at the Practising Law Institute Program on Corporate Governance. In a wide-ranging address, Higgins said the SEC has heard of concerns that company managements could “continue year after year” to come up with slightly different proposals from those filed by shareholders solely to keep shareholders’ resolutions from AGM agendas. “While we have not yet seen this concern materialize, it is certainly not beyond the realm of possibility,” he said.

The retirement systems of Ohio, Idaho and Hawaii are reportedly seeking to consolidate five separate putative class actions against Brazil’s Petrobras in New York federal court. According to legal portal Law360.com, they claim they are the right candidates to head shareholder litigation against the state-owned oil giant following bribery revelations.

France-based ESG research firm Vigeo has published its second analysis of international corporate social responsibility (CSR) reporting practices. The review derives from its rating of the commitments and corporate responsibility risks of listed issuers and covers over 1,300 companies based in Europe, North America, the Asia Pacific region and 15 emerging countries. Home page

SHARE, Canada’s Shareholder Association for Research and Education, says it is an ‘intervenor’ in a major securities class action case before the Supreme Court of Canada. CIBC v Green, which was heard by the Court on February 9, concerns the ability of investors to sue companies which provide incomplete or inaccurate disclosure about the state of their business, the group says. SHARE, represented by Groia and Company, is arguing that the ability of investors to seek a remedy for public company misrepresentations is critical to healthy and transparent capital markets.

Ratings agency Moody’s has welcomed the planned launch of buyside-to-buyside trading platform Luminex by a group of nine asset managers. A group including Fidelity, Blackrock, Capital Group, BNY Mellon, Invesco, JP Morgan Asset Management, MFS, State Street Global Advisors and T. Rowe Price are behind the platform which is designed to reduce stock trading costs by eliminating intermediaries, especially high frequency trading firms. It is “credit positive” for asset managers, Moody’s said. Within Luminex, the participants will be on equal footing; the consortium aims to operate the trading platform at break-even.

The proxy research firms that are signatories to the Best Practice Principles Group for Shareholder Voting Research (the ‘BPP Group’), which was launched last year in response to the European Securities & Markets Authority (ESMA), have unveiled their mechanisms for collecting feedback and monitoring how the principles are implemented. The group, which comprises most of the leading firms, is encouraging “all stakeholders to provide meaningful feedback and substantiated comments”.