RI ESG Briefing, January 5: ESG firms Vigeo and Eiris complete merger

Environmental

ClientEarth, the UK-based environmental law group, has predicted that increased scrutiny, in the wake of COP21, of carbon intensive companies’ reporting, particularly their disclosure of carbon associated risks to investors, could result in an ‘unprecedented number’ of complaints to financial regulators from environmental lawyers in 2016.

KKR & Co., the U.S private equity firm, has relaunched its Green Portfolio Program (GPP), which focused on promoting eco-efficiency at portfolio companies in partnership Environmental Defense Fund (EDF). It will now be called the Green Solutions Platform and be expanded to include business activity that pro-actively tackles climate impacts whilst creating value for communities and companies alike (“eco-innovations” and “eco-solutions”). Previously it invested primarily in ‘eco-efficiency’ projects, which sought energy, water and waste reductions.

Allianz Global Investors, the German investment giant with €412bn under management, has agreed to buy, through a managed fund, a number of solar PV plants located in Denmark from European Energy AS, a renewable energy company. The transaction depends on due diligence and the Danish Transmission Authority deciding on the applicable feed-in-tariff.

Social

Campaign groups and NGOs led by mining industry not-for-profit Earthworks, say worse tailings dam failures, such as the deadly Samarco incident in Brazil, are “on the way – unless industry and regulators act”. The comments come in a letter to industry group the International Council on Mining and Metals (ICMM), which has announced a global review of tailings storage standards and critical controls. “These disasters are part of a worrying trend,” the campaigners write. ICMM CEO Tom Butler replied saying he welcomed the “proactive engagement on this matter”. Link

Triodos, the Dutch-based sustainable bank, has jointly released a report , the Ethical Consumer Markets Report which shows that ethical spending in the U.K has grown in 2015 despite ‘difficult market conditions’: Ethical investment grew by 9% to £13bn; Combined ethical money and ethical spending totals rose from £78bn to £80bn; and, the ethical market grew from £35bn to £38bn. However the report, created in partnership with Ethical Consumer, indicated that the value of money held ethically fell by 2%.h6. Governance

Vigeo and EIRIS, the ESG research firms that announced their merger in October last year, have said they have now officially completed the transaction. The merger was approved by Vigeo’s General Assembly of Shareholders on December 22; the meeting also approved the raising of €6.3m in new capital raised by Vigeo for the future development of the new entity. A new logo symbolising the combined entity has also been revealed.

The Climate Disclosure Standards Board (CDSB), an international partnership of leading business, investor and environmental organisations, has said that more than 150 organisations have signed up to its Fiduciary duty & climate change disclosure statement. The CDSB aim to raise organisations’ consciousness of the economic effects of climate change on firms, industries and investment portfolios, an understanding of which, they argue, is key to fulfilling fiduciary responsibility.

Government Pension Fund Global, Norway’s £570bn sovereign wealth fund managed by Norges Bank Investment Management, has reportedly sold 27m of its shares in U.K-based supermarket chain Tesco – bringing its total stake below 6%. Since August, Norges has sold over 83.5m shares (worth £125m) in Tesco. It comes after an accounting scandal at the firm.

The Taiwan Stock Exchange’s (TWSE) newly launched Corporate Governance Center website, part of the country’s five-year ‘Corporate Governance Roadmap’ which aims to advocate and cultivate a culture of good corporate governance in the country, is attracting interest from an increasing number of investors, corporate directors and industry leaders with between 20,000-25,000 visitors per month.

Borsa İstanbul, the Turkish exchange, has revised article five of the ‘ground rules’ for its BIST Sustainability Index, widening its scope. The change will add the volunteer companies of BIST 100 Index to the “list of companies subject to assessment”, in addition to BIST 50 Index constituents.

A U.S federal judge has reportedly certified two shareholder class actions against Facebook Inc. The actions, Reuters reports, accuse the social media company of hiding concerns about its growth forecasts in order to inflate share prices prior to its $16bn initial public offering (May, 2012). Facebook made its market debut at $38 per share, which subsequently fell to $17.55 in September and stayed below the price for more than a year. Facebook is appealing the decision.