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RI ESG Briefing, Feb. 3: New research from Oxford University’s Stranded Assets Programme

The latest environmental, social and governance news

Environmental

New research from the University of Oxford’s Stranded Assets Programme has found that so-called Negative Emissions Technologies (NETs) have the potential to remove carbon dioxide from the atmosphere and reduce the impacts of ocean acidification and man-made climate change. The report – “Stranded Carbon Assets and Negative Emissions Technologies” – finds NETs may help to extend carbon budgets and “therefore provide more time for humanity to reduce emissions”. NETs are defined as Afforestation, Agricultural Soil Carbon Sequestration, Biochar, Bioenergy with Carbon Capture and Storage (BECCS), Direct Air Capture (DAC), Ocean Liming, Enhanced Weathering, and Ocean Fertilisation. Link to programme’s home page

New York liberal arts college the New School has announced that it will divest from fossil fuels and pursue a comprehensive plan to address climate change. “The New School has a long history of engaging in and offering creative solutions to society’s most pressing issues,” says New School President David Van Zandt. It follows a student divestment campaign. Its endowment is around $300m (€264.3m)

Following the now almost certain failure of the Cape Wind project, more attempts are being undertaken to build America’s first offshore wind park, press reports say. According to Climate Central, 12 wind energy companies were set to bid for the right to develop wind parks in an area 12 nautical miles north of the island of Martha’s Vineyard.

The Asian Development Bank (ADB) has agreed to provide up to $85m (€74.9m) in loans for an 81MW wind project in Thailand, reports Wind Power Monthly. The Chaiyaphum project is being developed by a special-purpose joint venture, 90% owned by Thai independent power producer Electricity Generating Public Company (EGCO), and 10% by German renewables developer Pro Ventum.

Social

The New York State Common Retirement Fund has withdrawn a shareholder proposal filed with Trillium Asset Management calling on ExxonMobil to expand its equal opportunity policies to include sexual orientation and gender identity after the oil and gas giant met their demands. Trillium had filed its first shareholder proposal with ExxonMobil regarding the company’s non-discrimination policies in 2001 and has regularly filed similar proposals since.

The Impact Investors Council (IIC) in India has submitted representation to the minister of state of finance requesting the government to partner with it and help galvanise the impact investing landscape in the country. The Business Standard reports that the IIC as saying the impact investment industry in India is currently worth around Rs 10,000-crore (€1.4bn) and is projected to exceed Rs 40,000 crore (€5.7bn) by 2020. The ICC is also working on national standards for impact assessment and measurement.

Not-for-profit The Maturity Institute, its professional arm OMS LLP and Long Finance, an institute that promotes long-termism, will release the first index that identifies the extent to which the UK’s largest 150 firms are able to generate business value and mitigate risk with respect to their human capital stakeholders. The Organization Maturity Index (OMI: UK150) will launch in Spring 2015. Link. Governance

The £14.1bn (€17.7bn) Strathclyde Pension Fund has confirmed GES Investment Services as its provider of responsible investment overlay, in a contract notice filed to the EU’s tender database. The fund had said last year that it intended to hire a permanent provider after a successful two-year pilot with the Swedish outfit. A total of four offers were received, the fund added.

The Ecumenical Council for Corporate Responsibility (ECCR), the UK faith investment group, and Rathbone Greenbank Investments are reportedly backing new church-led research that will investigate links between human trafficking and FTSE 100 companies. Anglican Communion News Service (ACNS) said the idea is to highlight best practice so that lives can be saved and that the research is prompted by fears that companies may inadvertently become involved in human trafficking via their supply chains.

CalPERS will receive $125m in damages from rating agency Standard and Poor’s (S&P) as part of a settlement of a lawsuit which the $296bn (€261bn) US pension giant brought against S&P six years ago, the Wall Street Journal (WSJ) reports. The suit stems from losses that CalPERS says it sustained during the financial crisis of 2008. According to the WSJ, S&P peers Fitch and Moody’s Investor Services were also named in CalPERS’ lawsuit from 2009. Although Fitch has settled with the pension scheme, CalPERS will continue to pursue Moody’s over damages, the newspaper said.

The Singapore Stock Exchange (SGX) has released a new guide on corporate governance. It looks at specific principles and gives guidelines on corporate governance in a question-and-answer format. It said recent surveys showed that companies were not making meaningful disclosures about remuneration, risk governance, board diversity or sustainability.

The Shareholder Association for Research and Education (SHARE), the Canadian governance body, has published a report looking at whether investors should demand better disclosure from Canadian corporations on political spending which it hopes will spark discussion amongst institutional investors on the issue. It argues that Canada’s capital markets have benefitted from increased disclosure and many matters not previously subject to disclosure under strict financial materiality tests have been added to the roster of relevant information for investors in recent years.

Dominique Biedermann, Chief Executive of Swiss corporate governance firm Ethos, says he’s confident that a majority of shareholders in adhesives firm Sika will reject the unfriendly takeover bid by French glass group Saint Gobain. Speaking to Swiss daily Blick, he said an Ethos-led coalition of shareholders that opposed the takeover now represented 6.4% of Sika’s share capital. Ethos, which represents 150 Swiss pension schemes, was also being supported by Anglo-Saxon investors – among them asset managers Threadneedle and Fidelity. Together they own 8% of the Swiss firm.

Colin Melvin, CEO of Hermes Equity Ownership Services (EOS), the engagement firm that is ultimately owned by the BT Pension Fund, has said that it will intensify its engagement efforts on tax this year. Melvin was tweeting in reaction to a Responsible Investor article describing the increased scrutiny on tax amongst investors.