RI ESG Briefing, January 17: SEC to hold event focused on shareholder engagement

Environmental

World clean energy investment totalled $333.5bn last year, up 3% from 2016 and the second highest annual figure ever, according to Bloomberg New Energy Finance. The total was buoyed by China’s record breaking $132.6bn investment in clean energy last year. The rising investment comes in spite of falling capital costs for solar technology. Cumulative investment in clean energy since 2010 now stands at $2.5tn.

Copenhagen Infrastructure Partners (CIP), the renewable energy investor backed by PensionDanmark and other Danish schemes, has announced total commitments of over Kr46bn (€4.7bn) as it reaches its fifth birthday. PensionDanmark, which is the sole investor in two CIP funds, has provided a total investment commitment of Kr18bn (€1.8bn). CIP’s four funds have helped finance 13 energy infrastructure projects in North-western Europe and North America within offshore wind, onshore winds, biomass power plants, solar power, and transmission networks.

Climate Disclosure Standards Board (CDSB) has published a new discussion paper on the materiality of climate-related financial disclosures based on the TCFD’s recommendations. It highlights the main challenges and potential strategies for “materiality determination”. The CDSB will hold a webinar on the topic on the 29 January 2018.

The carbon footprint of firms listed on the Nasdaq Helsinki fell by 16% last year, according to Sitra, the Finnish Innovation Fund. A million-euro investment in the listed companies in Helsinki produces 199 tons of carbon dioxide emissions (tCO2e), according to the report, last year it was 236 tCO2e. Only 31% of the companies listed on Nasdaq Helsinki currently report their greenhouse gas emissions.

Social

Hermes Investment Management, the £30.8bn (€34.4bn) responsible investment house that is owned by the BT Pension Scheme, has published a report raising investors’ awareness of the risk of slavery in the cobalt supply-chain, particularly in the Democratic Republic of Congo. ‘Modern slavery: the true cost of cobalt mining’ highlights the “flipside of cobalt’s stellar financial performance”.

Independent UN experts have expressed concerns about reports that indigenous Sengwer peoples in western Kenya have been attacked and forcibly evicted from their homes because of a European Union funded water management project in the country. The €31 million Water Towers Protection and Climate Change Mitigation and Adaptation project was jointly launched in 2016 by the EU and the Kenyan government.h6. Governance

The U.S. Securities and Exchange Commission’s Division of Economic and Risk Analysis (DERA) is partnering with New York University’s Salomon Center for the Study of Financial Institutions to bring together regulators, practitioners, and academics for a half-day symposium on January 19 at NYU. Panelists will discuss the evolution of shareholder engagement over time and its impact on corporate governance, focusing in particular on the “shifting roles and influence of institutional and activist investors”. “Shareholder engagement serves as one of the cornerstones of good corporate governance, and the continually-changing landscape for retail participation in our markets means that we must continually examine the role and responsibilities of institutional investors and other intermediaries,” said Dr. Jeffrey Harris, Director of DERA and the SEC’s Chief Economist. The event will kick off with welcoming remarks by SEC Chairman Jay Clayton.

Blackrock claims 2017 was a breakthrough year for sustainable exchange traded funds, with $5.2bn being invested globally. The previous calendar year’s inflow was $2.4bn. The US passive investment giant, said “changing end investor attitudes and regulatory guidelines in European countries regarding ESG considerations may be contributing to EMEA-listed funds attracting more interest than US-listed ranges”.

The Luxembourg Bankers’ Association (ABBL) has formed a working group to define its global strategy on sustainable finance. The formation of the group, which hopes to contribute to the work being down around sustainable finance at the European level, follows the ABBL’s recent sustainable finance survey, which found that 85% of financial institutions polled incorporate social and environmental elements in their vision and strategy.

UK specialist investment firm, Kames Capital has highlighted three future “sustainable disruptors” for investors to consider. The £44bn manager has named Everbridge, a US cloud-based emergency communications software provider; Insulet, a US manufacturer of tubeless insulin pump patches for diabetics; and, Taiwanese company Chroma Ate, which provides testing and measurement equipment used in solar, electric battery, and semiconductor manufacturing.

S&P Global Ratings has published a series of commentaries discussing the implications of battery storage for the US power market. It concluded that battery storage is a possible market disruptor that could upend America’s existing power model.

As You Sow has welcomed McDonald’s announcement that it will recycle all post-consumer packaging in all its restaurants by 2025. The action follows several years of dialogue with the company by the US advocacy group, who first filed a shareholder resolution with McDonald’s in 2012. As You Sow have also engaged “quick service peers” like YUM Brands, Dunkin’ Brands, and Chipotle in the US on the issue.