Environmental
A fund managed by BlackRock Real Assets has completed the acquisition of a 100% interest in two operational wind projects in Ireland from GE Energy Financial Services, an arm of the New York-listed industrial giant. The deal comprises the 17MW Acres facility in Donegal and the 34MW Barranafaddock farm in Waterford. The projects are supported by a 15-year power purchase agreement. “This transaction represents BlackRock’s continued focus on renewable power investments, where the firm has over $2.5bn of equity assets under management’ said Rory O’Connor, Head of Renewable Power for Europe at BlackRock.
A Brazilian pulp and paper company has issued a $500 million green bond. Suzano Papel e Celulose produces eucalyptus-based pulp and paper from its 1.1 million hectares of forestry land across Brazil. 63% of its forests are certified under the international Forest Stewardship Council standard and the national Cerflor standard. Proceeds from the 10-year, 5.75% green bond will be used to support six areas: the sustainable management of certified forests, the restoration of native forests, the maintenance of conservation areas, the development and installation of wastewater treatment plant, hardware to reduce chemical consumption, renewable energy and energy efficiency improvements. The notes have a second-party opinion from Sustainalytics.
Bank of China has issued what is claimed to be the world’s largest international green bond, attracting strong participation from European investors. The bank came to market with five tranches of labelled notes – four out of its Luxembourg branch and one out of its New York office. The deal included dollar-denominated issuance of $2.25 billion, €500 million in euro-denominated notes and CNH1.5 billion in offshore renminbi. EY performed a verification on the transaction, awarding it a ‘dark green’ rating – the highest score on its environmental rating scale.
Social
The UK government has commissioned a new review of how female representation in leadership positions in British businesses can be reviewed under the guidance of Sir Philip Hampton, chair of drugs giant GlaxoSmithKline, and UBM’s Dame Helen Alexander. The review follows Lord Mervyn Davies’ Women on Boards report from October 2015, which suggested that 33% of directors at FTSE 350 companies should be women by 2020, and the publication of the 2016 Female FTSE Board Report. According to the research, female representation on FTSE 100 boards has increased from 12.5% in 2015 to 26% today.
The UK’s Prince Charles has said he fears “the door is closing faster than we think” on the opportunity to develop a “new economic framework that puts social well-being and nature’s own ingenious economy back at the heart of our thinking”. He was speaking at the Accounting for Sustainability ‘Measure What Matters’ event in London on July 12. He went on to say: “And however vital statistics are, we cannot afford to let our arguments about who’s the most accurate mean that at the end of the day we just test our world to destruction.”h6. Governance
Prosecutors in the US have reportedly announced criminal charges against five current and former employees of proxy solicitation firm Georgeson in a case that first emerged in 2012. Reuters said they are accused of engaging in a fraudulent scheme to gain shareholder voting information with bribes. The prosecutors did not name Georgeson in their criminal complaint, Reuters said. It is alleged the people worked together to bribe an employee of an unnamed proxy advisory firm. The report quoted a Georgeson spokesperson as saying it “promptly and proactively” contacted the Securities and Exchange Commission and has cooperated fully with the investigation.
Dutch pension fund manager APG has reportedly formed a partnership with technical research institute TNO and Maastricht University to look at whether it can make use of artificial intelligence and blockchain technology. IPE.com said the research would also focus on how APG can reduce carbon emissions.
Corporate executives may mislead analysts and shareholders by lowballing earnings reports in order to give themselves the opportunity to buy their company’s stock at a cheaper price, a working paper by researchers at the US National Bureau of Economic Research (NBER) has found. By examining retail customer data and what managers say at AGMs, researchers found that executives were generally more pessimistic when they already had positive information about the upcoming quarter’s figures, only for shares to have a positive bump a few days later when earnings are correctly reported. “This implies that insiders understate their private information to purchase undervalued stocks prior to the price increase,” they write.
The California Public Employees Retirement System (CalPERS), the largest US public pension fund, has reportedly lost an appeal relating to its attempt to revive its lawsuit seeking to hold dozens of banks liable for losses it suffered on Lehman Brothers bonds they helped underwrite. Reuters reported that the 2nd U.S. Circuit Court of Appeals in New York said CalPERS missed a three-year deadline to sue.
ESG research firm Sustainalytics’ new ESG Spotlight Series report, A New Era for Data Privacy? considers the impacts of the new Privacy Shield agreement, which was approved by the EU member states last Friday, on US IT companies. The research shows that US IT companies generally are poorly prepared to meet rising regulatory requirements from Privacy Shield and the General Data Protection Regulation (GDPR).
Chief executive pay at the world’s largest banks ratcheted up by 7.6% in 2015 to make the average pay packet worth $13.1m each, according to analysis by compensation firm Equilar and the Financial Times of the 20 most highly paid bank bosses. The biggest pay-outs went to executives at the top 6 US banks –JPMorgan Chase, Goldman Sachs, Citi, Wells Fargo, Bank of America and Morgan Stanley – where packages rose by an average of 10% and, at $20.7m, are almost twice as large as those of their European counterparts. JPMorgan’s CEO Jamie Dimon remains the best paid in the world with a total remuneration of $27.6m.
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