RI ESG Briefing, February 19: Investors target 48 US firms over lobbying disclosure

Environmental

The consortium behind the massive London Array offshore wind project has announced it will not proceed with the development of Phase 2 of the facility. The decision follows a review of consortium members’ respective portfolios, technical challenges and “environmental uncertainties” linked to its effect on birds. The original plans called for a wind farm of up to 1000MW, with 630MW in Phase 1 – which is complete, fully operational and the world’s largest offshore wind farm.

There is a new high of investor signatories to environmental data body CDP [Carbon Disclosure Project): 767 representing US$92trn of assets. That’s the highest number of investor signatories in the 12-year history of CDP’s climate change program.

The Oakland Institute, a California-based think tank, has released a study showing that institutional investors – including hedge funds, private equity, pension funds, and university endowments – have “trained their sights on America’s agricultural infrastructure”. Down on the Farm author Lukas Ross warned of a “new class of land barons” that could imperil the US food supply.

Social

The Islamic Banking Database is an initiative of the World Bank that aims to address a perceived lack of comprehensive and consistent data on Islamic finance. The work-in-progress database “aims to provide some basic data on the subject, in an easy-to-access format”. It compiles the names of about 400 Islamic financial institutions from 58 countries. It presents financial data for about 70 of these institutions and it excludes insurance (takaful) institutions and will be updated regularly.

German insurance giant Allianz has become the latest signatory to the UN-backed Principles for Sustainable Insurance (PSI), joining 40 other peers – among them Munich Re, Swiss Re, Axa and Aviva in backing the initiative. Under the PSI, signatories pledge to consider environmental, social and governance (ESG) factors not only when investing but, as the charter states, “in business principles, strategies and operations.” In a statement, Allianz chief executive Michael Diekmann said that in accordance with the PSI, the insurer had integrated ESG factors into its new business since the start of the year.h6. Governance

A group of 60 institutional and individual investors have filed shareholder resolutions at 48 US companies as part of a 2014 proxy season initiative asking companies to annually report their federal and state lobbying. It’s the fourth year such proposals have been filed. The effort is organized by the AFSCME Employees Pension Plan and Walden Asset Management. The companies include major names such as AT&T, Bank of America, BlackRock, Boeing, Chevron, EBay, ExxonMobil, Google, Morgan Stanley, Verizon, Wal-Mart and Yahoo. Filers include public pension funds, labor pension plans and organizations, asset management companies, foundations and faith investors. New York State Comptroller Thomas DiNapoli stated: “We need sunlight on lobbying operations so we can evaluate potential risks to our investments. Any political spending, including lobbying, made with shareholder dollars should be disclosed.” Link

Proxy firm Institutional Shareholder Services (ISS) has launched QuickScore 2.0, the updated version of its global corporate governance scoring solution for institutional investors. It is designed to help investors identify and measure corporate governance risk within their portfolio companies. The new offering provides a score for each company in its coverage universe that measures the company’s level of corporate governance risk both overall and based on four broad pillars: board structure, compensation/remuneration, shareholder rights, and audit.

A group of European investors have reportedly written to the European Union authorities calling for Financial Transaction Tax (FTT) proposals to be halted. The group has written to the European Council, Parliament and Commission saying the plan would hit savings and economic growth, IPE.com reported. The letter was signed by Allianz Global Investors, BlackRock, Capital International, Eumedion, Fidelity, M&G, PIMCO, Robeco, Schroders, State Street, UBS and Dutch pension giants PGGM and APG, the report added.

Norwegian mutual insurer KLP has sought the removal of Bernt Reitan, chairman of fertilizer firm Yara International that is caught up in the country’s largest ever corporate bribery scandal, according to reports. In January Yara accepted a record fine of NOK295m (€35.5m) for bribery in India, Libya and Russia, and several former and current executives were indicted for corruption. Link to KLP