RI ESG Briefing, Jan. 7: UK coal pension funds lead $350m settlement with solar panel firm

The latest responsible investment developments

A shareholder action led by the UK’s Mineworkers’ Pension Scheme and British Coal Staff Superannuation Scheme has secured a $350m settlement in their case against solar panel maker First Solar, according to law firm Robins Geller. It was “after a long legal battle and on the day before jury selection” in a case pending in the US District Court for the District of Arizona. The lead plaintiffs had claimed that First Solar discovered a manufacturing defect that caused its modules to suffer rapid power loss and a design defect that caused rapid power loss in hot climates. Robins Geller said the defendants “denied all of lead plaintiffs’ claims”.

Nest Corporation, the UK defined contribution workplace scheme, has launched a new procurement inviting fund managers to tender for unlisted / direct infrastructure equity funds. It said it believes private infrastructure equity investments “can offer huge opportunities for its 8.5m members”. The procurement follows Nest’s recent appointment of private credit mandates announced last September. Nest receives more than £400m a month in member contributions and is forecast to grow to £20bn in assets by 2022. Nest added: “Successful fund managers will need to demonstrate they can offer a high quality and evergreen investment processes, a robust risk management framework and consideration of environmental, social and governance factors.” Applications can be made through the Bravo platform and must be submitted before February 17.

Willem Buiter, former Citigroup Chief Economist and Monetary Policy Committee member at the Bank of England, has said that central bank asset purchase programs explicitly targeting green bonds or ‘Green QE’ should be expected to take place “in the not-too-distant future in both the eurozone and the UK”. According to Buiter, objections made by Bundesbank President Jens Weidmann on the grounds that the practice runs counter to the principle of market neutrality “seems vacuous”.

ClientEarth has filed a complaint against BP at the UK’s National Contact Point (NCP) alleging that the oil giant has misled the public over the extent of its low-carbon energy activities relative to its fossil fuel extraction. The NCP is an OECD country’s national ‘outpost’ to deal with complaints under the Guidelines for Multinational Enterprises ‘soft law’ mechanism.

The European Association of Public Sector Pension Institutions (EAPSPI), whose 24 institutional members from 15 European countries manage around €900bn, has adopted a declaration on ESG. It said that, “in the longer-term, an inclusive society, human well-being and stable ecosystems are conditions to a functioning economy and thus of the financial returns on investments. Extra-financial considerations therefore are also a part of risk management and mitigation and are directly linked to fiduciary duty.”

UK local authority pension schemes may reportedly be banned from divesting unlawful Israeli settlements in the occupied West Bank according to new policies introduced by Prime Minister Boris. According to a policy paper, the government will "stop public institutions from imposing their own approach or views about international relations, through preventing boycotts, divestment or sanction campaigns against foreign countries and those who trade with them".

There are now 273 institutional investors signed up to Japan’s Stewardship Code (the Principles for Institutional Investors, according to the Financial Services Agency. The FSA said the breakdown was as follows: trust banks (6); investment managers (188); insurance companies (23); pension funds (49); and others (service providers, etc.) (7).

Danske Bank has been sued for DKK1.5bn ($224m) by a group of 60 international investors according to Reuters. The suit alleges that the bank did not disclose that “its financial income statements and retained earnings included significant earnings from known illegal high-risk money laundering activities”. This is the third suit which has been filed over an alleged money laundering scandal relating to €200bn worth of suspicious transactions channelled through Danske’s Baltic operations from 2007 to 2015

MSCI has launched a range of fixed income ESG and factor indices, with Jana Haines, Head of Index Products, Americas, saying: “Investors are increasingly demanding ESG integration across all asset classes and looking to Factors – such as Carry, Quality, Value, Size and Risk – to more precisely define how they can better identify, measure and manage risk and return in their portfolios.” 

Minerva Analytics has written to SEC Chair Jay Clayton complaining that the “highly-charged and well-funded political campaign” against proxy firms includes letters from supports that are “works of fiction”. “The irony of this falsification is not lost on those of us who stand accused of providing research that is, allegedly “full of errors,” writes Minerva CEO Sarah Wilson in a nine-page document opposing planned changes to rules governing proxy firms.