RI ESG Briefing, February 21: Rhode Island fund engages with student debt firm Navient

Environmental

An expert group has been appointed by the Norwegian Ministry of Finance to assess whether the Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund, should continue to invest in the energy sector. It comes on the heels of Norges Bank’s advice to remove oil and gas stocks from the fund’s benchmark index to reduce vulnerability to fluctuations in oil and gas prices. The government has also written to Norges Bank to ask for further information and will also hold a public consultation to seek views on this advice. The matter is to be concluded in the fall of 2018. Link

China’s new “war on pollution” could lead to “national or even global recession”, according to Oxford University academics. A report published by the Smith School of Enterprise and the Environment, University of Oxford has warned that China’s pivot away from the extractive industries could lead to a downturn — as the Chinese real estate market is closely linked to such industries.

The United Nations Global Compact has announced the formation of a Business Action Platform for the Ocean — a three-year global programme bringing together business, civil society, the UN and Governments to advance the ocean economy and sustainable development. The programme is part of a broader portfolio of Action Platforms introduced by the UN Global Compact to facilitate the achievement of the UN 2030 Agenda for Sustainable Development and its 17 Global Goals.
A group of NGOs have urged the mining governance body the Extractive Industries Transparency Initiative (EITI) to take action against ExxonMobil and Chevron over what they say is the oil giants’ “persistent refusal” to publish US tax payments – which the campaigners say is a clear violation of the EITI Code of Conduct.

Social

Thirty-six percent of individual investors deem social impact as important as returns, according to a report commissioned by UK finance firm IW Capital. It means that more than 12m investors would refrain from investments due to ethical concerns about a product or service, it said – based on a survey of 2,004 people.

Allia, a social finance not-for-profit group in the UK, says it has issued over £250m of bonds to support charities and to tackle issues such as unemployment, social exclusion and affordable housing. This was raised through seven retail charity bonds, representing more than £157m of the overall total, designed to allow charitable organisations to raise unsecured fixed-rate finance through bonds listed on the London Stock Exchange.

Community Housing Capital and Calvert Impact Capital have announced the closing of a $15m credit facility that will supply flexible, unsecured debt for investment in affordable housing real estate transactions. Calvert Impact Capital is acting as the lead arranger for the facility, which aims to address the lack of funding for affordable housing in the UK. The loan syndication model is rare in impact investing, where organizations seeking capital are usually on their own in the search for investors—an expensive and time-consuming process for any non-profit organization.h6. Governance

The US student loans sector is now on investors’ radar. A Rhode Island pension fund is trying to get the issue onto the AGM agenda at Nasdaq-listed Navient Corporation – which manages more than $300bn in federal and private student loans for approximately 12m people. State Treasurer Seth Magaziner has sent a letter to the U.S. Securities and Exchange Commission in response to Navient’s appeal that the commission do not recommend enforcement action if it omits the resolution. Over a million borrowers with Direct Loans at Navient, have defaulted on their student loans. Navient’s AGM is likely to take place in May.

KWAP, Malaysia’s second-largest pension fund with around $30bn in assets, has signed up to the Principles for Responsible Investment (PRI). KWAP – Kumpulan Wang Prasarana – already has ESG guidelines for fixed income and equities and become a signatory to the Malaysian Code for Institutional Investors in 2015. KWAP is the second Malaysia-based fund to sign the PRI after Khazanah Nasional, the Malaysian government sovereign wealth fund, which became a signatory a year ago.

Renault CEO Carlos Ghosn has reportedly taken a 30% pay cut following pressure from the French government – which owns 15% of the car group. Ghosn will focus on strategic issues after appointing Thierry Bolloré as Chief Operating Officer.

Women in Spain earn 30% less than men, with a €4,745 difference in salaries, according to a report conducted by the country’s tax workers’ union GESTHA. The report warns that it will take almost seven decades to close this gap and calls for parliament to propose and implement measures aimed at its more timely reduction. The gap becomes more pronounced for salaries over €16,000, with half as many women as men earning between €50,000 and €80,000, and only one in five earners of €140,000 being women.

France’s public service additional pension scheme (ERAFP), a 100% SRI investor with €27bn in assets, has hired Ampère Gestion to a €200m real estate asset management mandate, with a substantial share of investments in intermediate housing. It has signed up La Française and Swiss Life REIM to two standby mandates for the same portfolio. AMPERE Gestion was set up in April 2014 by SNI Group, a subsidiary of Caisse des Dépôts, and the country’s biggest residential landlord with a portfolio of 346,000 units.

A $17bn coalition of Christian investors have reportedly warned businesses to appoint more female board directors. The 61-member Church Investors Group will vote against the chair of the board nomination committee at listed UK firms where women account for less than 33% of board members.
New £27bn UK pension pool Brunel Pension Partnership have reaffirmed their commitment to responsible investment in their first Annual Report for 2016-17. The report reads: “We believe in making long-term, sustainable investments supported by robust and transparent processes.”