RI ESG Briefing, Jan. 12: Vermont, Climate Bonds, Frankfurt SE, ExxonMobil, PGGM, Standard Life

The latest environmental, social and governance developments


Vermont Governor Peter Shumlin has said the state should take action against climate change in 2016 by divesting public pension funds from coal and oil major ExxonMobil, because of what he said was its history of sowing doubt about climate change. In his annual State of the State address, he said: “The urgency for us to take every sensible action against climate change has never been greater.” He went on: “Vermont should not wait to rid ourselves of ExxonMobil stock.” Link

The Climate Bonds Initiative industry group says Credit Agricole CIB topped its fourth quarter green bond underwriters table, while the overall 2015 year-end top spot went to Bank of America Merrill Lynch. It said a total of $14.87bn of green bonds were issued in the last three months of the year, with November the largest monthly issuance ever with $7.4bn of green bonds. Overall, 2015 was the biggest year ever for green bonds, with $41.8bn issued.

Emerson Electric, the US engineering group, is facing a shareholder resolution requesting the company adopt time-bound quantitative, company-wide greenhouse gas emissions reduction goals. SRI firm Walden Asset Management said: “While Emerson has several products that improve their customers energy efficiency and reduce GHG emissions, the company has generally had poor disclosure around several topics of importance to ESG practitioners.” Emerson has four shareholder proposals up for a vote this year, including ones on sustainability reporting, GHG emissions goals, lobbying disclosure, and political spending disclosure. Emerson’s AGM is on February 2 in St. Louis. Link to proxy


Two Republican lawmakers in the state of Florida have filed legislation to allow for private companies to invest in social impact bonds in the jurisdiction. Florida State Representative Chris Sprowls of Palm Harbour and State Senator Aaron Bean of Fernandina Beach have filed bills in their respective chambers. Sprowls said in a statement: “Despite the billions of dollars spent on government priorities; the measurement of program metrics, exploration of innovative partnerships and evaluation of outcomes seem to remain unwelcome in some circles. We want to change that.”

PGGM, the Dutch pension asset manager, says it and Banco Santander have entered into a risk sharing transaction covering a portfolio of more than 6,000 loans made to small- and midsize enterprises (SMEs) in Spain. The loans originated from Santander and are collectively worth €2.3bn. PGGM said the deal enabled it to further diversify PFZW’s investments and provide the scheme’s members with “stable long-term returns.” PGGM has invested more than €5bn of its €183bn in assets in risk sharing transactions.h6. Governance

Most German firms listed on Frankfurt’s stock exchange plan to streamline quarterly reports following new rules from the exchange’s operator requiring them to only publish full reports semi-annually. Citing a survey from PR firm Cometis, Reuters said only 18% of prime listed firms had no plans to reduce the size of their quarterly reports. Most companies, meanwhile, would now provide the bare minimum for investors after the first and third quarters, including a business wrap-up and full-year outlook, Kay Bommer, Head of German Investor Relations Association DIRK, was quoted as saying.

Shareholders in ExxonMobil have filed a series of resolutions on climate change ahead of the oil giant’s annual general meeting on May 25, according to Inside Climate News. The shareholders are calling for greater transparency over how much it spends on lobbying and opposing emission regulations, the report added. And they want the company to agree to comply with measures to hold global warming under the 2-degree Celsius limit set by the Paris agreement, it added.

Standard Life Investments, the UK-based asset manager with £250.6bn (€331bn) under management, says it is opposed to Royal Dutch Shell’s bid for gas firm BG. David Cumming, Head of Equities, said the proposed terms of the deal are “value destructive” for Shell shareholders. His colleague Guy Jubb, Head of Governance and Stewardship, added: “We have engaged with Shell to explain our views and to encourage them to re-negotiate. By voting against in respect of our clients who have an interest in Shell we are sending a clear message to Shell’s Board, reinforcing our opposition to the deal on the proposed terms.”

The NECAIBEW Pension Trust Fund, the Illinois-based union-linked investor, has had an attempt to revive a putative class action accusing Bank of America of raising billions of dollars in stock offerings in 2008 without disclosing their secondary mortgage market exposure rejected by the US Supreme Court. The court said the petition was denied on January 11.

SRI investor Zevin Asset Management has withdrawn a shareholder proposal at US courier United Parcel Service (UPS) that would have had UPS disclose its involvement with political lobbies in the US. The withdrawal was prompted by a no-action letter from UPS to the Securities and Exchange Commission (SEC). In it, UPS asks for permission to exclude Zevin’s proposal from its proxy materials on the grounds that it had already received a similar proposal from Walden Asset Management, another SRI investor. SEC rules permit companies to exclude shareholder proposals if they are submitted in duplicate form.

Eric Sarasin, the former Deputy Chief Executive of Swiss sustainable bank J. Safra Sarasin, has agreed to pay Cologne’s public prosecutor €200,000 to settle a lawsuit brought against him in connection with so-called “cum-ex-deals.” Sarasin’s lawyer said the payment of the fine put an end to the affair, adding that it was not an admission of any wrongdoing by his client. Sarasin resigned from the bank in November 2014 in order to fight charges of impropriety in connection with the deals, which involved the exploitation of a German tax loophole.