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RI ESG Briefing, July 5: Climate KIC seeks partner body for new Investor Network

The round-up of the latest ESG developments

Environmental

Climate-KIC, Europe’s largest public-private partnership tackling climate change, is looking for a partner organisation to develop an Investor Network to systematically connect the climate start-ups it “incubates” with investors. The Request for Proposals document, which sets the deadline for applications as June 23, expects the project to be completed by the beginning of 2018, with the stipulation that the successful organisation must be a ‘core’ or ‘affiliate’ partner of Climate-KIC.

Zurich Insurance Group has surpassed its 2020 carbon emission and energy consumption targets, and has set new targets to be achieved by 2025. The carbon-neutral Swiss insurer successfully reduced its in-house carbon emissions by 50% and energy consumption by 40% per employee, compared with 2007 levels. The firm will now seek to reduce its emissions and energy levels by 20% compared to a 2015 baseline by 2025.

Dutch NGO BankTrack has published a collaborative report highlighting the global banking sector’s $87bn financing of “extreme fossil fuels” in 2016. The Banking on Climate Change report shows that, despite a reduction of £24bn from the previous year, banks are still funding projects at a rate that will push us beyond the generally-accepted 1.5 ℃ climate change limit. Last week RI reported that the Bank of England had initiated a review of the impact of climate change on UK banks, as part of broader efforts to prevent financial instability caused by rising global temperatures.

Social

Hermes Investment Management, the £30.8bn fund manager owned by the BT Pension Scheme, has published its Modern Slavery Statement following a review in response to the UK Government’s landmark Modern Slavery Act 2015. Hermes aims to ensure that there is no modern slavery or human trafficking in any of its business dealings, it said.

The Dutch Association of Investors for Sustainable Development (VBDO) has published a report highlighting the “insufficient attention” paid by Dutch companies to the living wage. The report is the result of VBDO’s engagement with 38 listed Dutch companies, assessing their sustainability performance in relation to natural capital, paying the living wage and integrating the Sustainable Development Goals. Only 12 of the 38 firms disclosed their accounting policies on living wage.

OpenInvest, a US social impact investing platform, launched the world’s first refugee rights investment screen to coincide with United Nation’s World Refugee Day (20 June). The screen enables investors to identify and invest in publicly-traded companies that have positively contributed to refugee welfare.

Australian social enterprise Social Leadership Australia (SLA), founded by country’s oldest charity The Benevolent Society, has reportedly announced that it is set to close after almost two decades.Launched in 1999, the SLA was designed to educate government departments, not-for-profits, and corporate leaders about the importance of social corporate leaders about the importance of social impact for their organisations. The SLA will cease to operate from the 29 September 2017.

Governance

Companies and trade unions have signed up to a prolongation of the agreement made following the Rana Plaza apparel factory disaster, the Accord on Fire and Building Safety in Bangladesh. The agreement will enter into effect when the current Accord expires in May 2018. The Accord is a legally binding agreement to make factories in Bangladesh safe through independent safety inspections, remediation programmes, safety committees, training programmes and free trade union associations for workers to enable a credible complaints mechanism.

The Thirty Percent Coalition, the US diversity-focused investor group representing more than $3.2tn in assets, has seen a 27% increase in companies appointing women to their boards since its last report in October 2016. Since the inception of its ‘Adopt a Company Campaign’ in 2012, 151 companies have appointed a woman to their boards.

ShareAction, the UK-based campaign group, has brought together a coalition of 79 institutional investors representing nearly $8trn to demand that companies disclose more information on how they manage their global workforces. The Workforce Disclosure Initiative, which has received public support from the UK’s Pensions and Lifetime Savings Association, will initially survey 75 “mega-cap companies” listed on eight international stock exchanges, to assess their governance of workforce issues.

California Public Employees’ Retirement System (CalPERS) has had its Lehman Brothers class action appeal rejected by the US Supreme Court, Reuters reports. In a 5-4 ruling, the justices decided that the banks that underwrote billions in debt offerings before the collapse of Lehman in 2008 will not now have to defend a securities fraud lawsuit. Upholding a previous federal appeals court, the justices claimed that the giant Californian pension fund had waited too long to sue the banks.
In other efforts legal action by the California Public Employees’ Retirement System has prompted US media giant InterActiveCorp (IAC) to end its efforts to create a new class of non-voting shares. The proposed changes would have diluted the voting power of shareholders, which CalPERS claimed would give Chairman, Barry Diller, too much control over the company. Diller currently owns less than 8% of IAC’s equity but controls more than 44% of the company’s voting power through his ownership of all of IAC’s outstanding ‘super-voting’ Class B shares.