Return to search

RI ESG Briefing, July 10: National Association of Pension Funds on Barclays’ bonuses

The round-up of environmental, social and governance news

Environmental

Consulting firm Mercer says sustainable themed investments can best be accessed via unlisted alternatives, such as private equity, infrastructure, agriculture, timber and private debt/green bonds – “without the volatility exposure that characterizes listed markets”. The firm said: “In researching this space, Mercer has uncovered return and diversification benefits. We are making related opportunities available to our clients through research, advice and solutions services.” Link

CDC Entreprises, the investment company of France’s Caisse des Dépôts sovereign wealth fund, has launched a green technology fund, le Fonds Ecotechnologies, to invest in small and medium sized firms specialising in green technology. The fund will co-invest with private sectors partners in tranches of between €1m-10m.

Banks are looking at underwriting “solar bonds” to help finance rooftop power projects in the US, according to analysis from Bloomberg. It quoted Bill Heskett, Bank of America Merrill Lynch’s managing director of asset-backed securities, as saying the first deal may come in 2013. Link

Renewable power generation is expected to continue its rapid growth over the next five years, according to a new report from the International Energy Agency (IEA) called Medium-Term Renewable Energy Market Report 2012. The report says global power generation from hydropower, solar, wind and other renewable sources is projected to increase by more than 40% to almost 6,400 terawatt hours (TWh) – or roughly one-and-a-half times current electricity production in the US.

Social

UNCTAD, the United Nations Conference on Trade and Development, has developed a comprehensive Investment Policy Framework for Sustainable Development (IPFSD). It’s meant to provide guidance on cross-border investment policies, with a particular focus on foreign direct investment (FDI), although many of the guidelines in the section on national investment policies could also have relevance for domestic investment. Link to UNCTAD’s new World Investment Report 2012.

UK-listed companies are on their way to meeting government recommended targets of appointing 25% of women to their boards, according to BoardWatch. It found that 44% of board appointments since 1 March 2012 had been women. It said the number of women directors had increased by 4.2% since Lord Davies issued his report Women on Boards last February at the behest of the government.h6. Governance

The National Association of Pension Funds has welcomed the announcement that ousted Barclays CEO Bob Diamond will only receive his basic pay and benefits in his severance package. But it said the extent to which clawback can be applied to previous years’ bonuses needs clarification – “and reaches well beyond the CEO”. The bank’s audit of its business practices should include a full review of pay policy, the NAPF added. This was essential to rebuild confidence in the bank, and needed to go beyond senior executives. The NAPF said: “It should also be firmly based on the premise that shareholders, as the providers of risk capital, must earn a sustainable return on that capital before anything is available for distribution to staff.”

Beleaguered banking giant Barclays has been sued by an investor – Karen Kalaway – who claims her futures trading business was damaged by the bank’s manipulation of the European Interbank Offered Rate (Euribor). J.P. Morgan and Citigroup are also among the defendants named in the suit, brought by class action law firm Hagens Berman Sobol Shapiro.

French publicly listed companies can lower the threshold at which investors can file a shareholder resolution to below the 0.5% of shares currently required, under new rules put forward by the Autorité des Marchés Financiers (AMF) market regulator. An AMF working group headed by Olivier Poupart-Lafarge, former Deputy CEO of Bouygues, the French telecoms group, has been consulting in recent months to improve the dialogue around the annual general meeting between shareholders and investee companies. The document is currently in French only. Link

Drugs giant GlaxoSmithKline has agreed to pay $3bn to settle allegations of the largest healthcare fraud in US history. The US Justice Department alleged that GSK marketed Paxil, an anti-depressant approved only for use by adults, to patients under 18 in a period from 1998 to 2003. Court filings included descriptions of how the drug company illegally encouraged doctors to prescribe medicines.

Campaign group Transparency International has released a study of major global corporations’ anti-corruption reporting. Transparency in Corporate Reporting: Assessing the World’s Largest Companies scored 105 firms on their public commitment to transparency. Barclays is ranked 71st on the list, with Norway-based Statoil coming top. Extractives giants Rio Tinto and BHP Billiton were second and third respectively.

Responses to the Financial Reporting Council’s consultation on proposed changes to the UK Stewardship Code should be made by the end of this week (July 13). Link