RI ESG Briefing, January 8: SRI firms withdraw climate change proposal at US retailer Costco

The round-up of the latest ESG news

Environmental

US SRI investment firms Trillium Asset Management, Walden Asset Management, Boston Common Asset Management, and Calvert Investments have withdrawn their shareholder proposal at Costco Wholesale, the Nasdaq-listed US retailer, regarding greenhouse gas emissions and climate change policy. The proposal was withdrawn following several commitments from the company including resuming participation in the CDP (Carbon Disclosure Project). In addition, Costco’s next sustainability report in 2015 will include a discussion of the company’s approach to energy use within the context of the Intergovernmental Panel on Climate Change recommendations. The investors said: “We commend Costco for taking these positive steps towards addressing the company’s exposure to climate change.” Announcement

The investment arm of Australia’s Macquarie Group has paid €720m to acquire a 49.9% stake in a German wind park in the Baltic Sea that is currently being built by Energie Baden Württemberg (EnBW), the state-owned German energy firm. According to EnBW, the 80-turbine wind park, known as Baltic 2, will have power production capacity of 288MW when it is completed in the spring of this year. Under the terms of the deal, EnBW will operate and maintain the wind park in which it retains a 50.1% stake.

Ireland’s National Pensions Reserve Fund (NPRF) has made a “substantial” investment as part of a €60m corporate debt facility set up by wind and solar firm Mainstream Renewable Power. The four-year facility was arranged through BlueBay Ireland Corporate Credit, a vehicle established by BlueBay Asset Management. Link

JP Morgan has inked a deal with Nasdaq-listed US solar firm SolarCity for a $350m fund to finance residential solar power. The fund is the second created by the two companies, and a follow-up to a fund created to finance approximately $170m projects in 2013. “The financing makes it possible for thousands of American homeowners to install solar panels with no upfront cost and pay less for solar electricity than they currently pay for utility bills,” SolarCity said.

Social

The UK’s Charity Bank, which loans to charities and social enterprises, says it has become the first bank in Europe to achieve certification as a “B Corporation”. B Corporations are a new kind of status for companies that use the power of business to solve social and environmental problems. They are certified by the US based nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability and transparency. Announcement

The World Bank’s International Financial Organization (IFC) arm has bought the entire $42m issue of bonds from Colombian microfinance institution Bancamía, according to industry site MicroCapital. Bancamía was formed in 2008 in part by Fundacion Microfinanzas BBVA, part of the Spanish banking giant.h6. Governance

Vanguard Group, the US index fund giant with €3trn (€2.5trn) in assets, is to begin disclosing how it votes at companies’ annual meetings, Reuters reports. “We have said for a long time that engagement is important for us, and we want to provide more context around that,” Glenn Booraem, who oversees corporate governance for Vanguard, told the news agency. According to Booraem, Vanguard will, beginning this week, describe on its website the reasoning around five or so recent cases in which it raised concerns about board actions or voted against executive pay plans. Vanguard will not, however, disclose the names of the companies involved. Vanguard became a signatory to the Principles for Responsible Investment (PRI) in late November.

Environmental, social and governance (ESG) research firm Sustainalytics is preparing to set up an office in Australia, according to an interview with CEO Michael Jantzi in The Australian. The paper said it would add to the firm’s global network and that Jantzi saw the country as a “robust, highly sophisticated ESG market”. Referring to the Australian National University’s controversial decision to divest a range of fossil fuel firms in October last year, he went on to say that he had never seen elected officials “wade this deep into an investment issue. He was quoted saying: “For a democratically elected government to comment on the investment decisions of an independent organisation is quite extraordinary.” It set a tone that “emboldens” unhealthy behavior.

Failed Danish shipping fuels firm OW Bunker and Altor, the private equity firm that took it public last March, have been hit by a lawsuit from 25 of OW Bunker’s institutional investors, including Danish schemes ATP, PFA Pension and PensionDanmark. According to news reports, the investors are seeking DKK803m (€108m) in damages for being misled about OW Bunker’s fortunes in the prospectus issued prior to the firm’s initial public offering (IPO). Eight months after the IPO, OW Bunker declared bankruptcy owing to a crash in fuel prices and alleged fraud at its Singapore unit. Reports of the lawsuit come less than a month after it emerged that ATP, PFA and PensionDanmark had commissioned an investigation into why exactly the firm failed.

US agrochemical giant Monsanto is facing a shareholder proposal on lobbying spending disclosure at its annual general meeting on January 30, in St. Louis, Missouri. The motion was submitted by Andrew Behar, CEO of advocacy group As You Sow. The company says it is not in the “best interests of the company or its shareowners”. Other shareholder proposals on the proxy include proxy access (proposed by John Harrington) and independent chairman (private investors Grace Holden and Keith Schnip).

Norges Bank Investment Management (NBIM), which runs the assets of Norway’s NOK6trn (€658bn) Government Pension Fund Global, will publish its AGM voting intentions where it feels the move could help make a point, according to a report on pensions site IPE.com citing NBIM CEO Yngve Slyngstad. It quoted him saying it would only be done in certain situations and on a “limited basis”.