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RI ESG Briefing, July 16: Triodos raising new UK social impact bond

The round-up of environmental, social and governance news

Environmental

The Investor Group on Climate Change (IGCC), which represents institutional investors in Australia and New Zealand, has responded to Australian Prime Minister Kevin Rudd’s decision to bring forward the floating phase of Australia’s carbon price from July 1, 2014. The IGCC said confidence in the longevity of carbon pricing was the highest priority for investors in low carbon investment assets. “Knowing that carbon pricing will be here for the long term is more important to investors than the price in any one year,” said IGCC Chief Executive Nathan Fabian. Rudd today announced the termination of the carbon tax that was a key policy of predecessor Julia Gillard.

Mirova, the responsible investment arm of France’s Natixis, says its funds were “among the largest investors” in the new Climate Awareness Bond issued by the European Investment Bank (EIB), according to a tweet from the firm’s Executive Director Philippe Zaouati.

A syndicate led by investment bank J.P. Morgan is to provide €260m in funding for a joint wind project between Enel Green Power North America Development and GE Capital’s EFS Buffalo Dunes. The syndicate also includes Wells Fargo Wind Holdings, Metropolitan Life Insurance Company, and State Street Bank and Trust Company. Announcement

Social

A new £3m (€3.4m) five-year social impact bond is being raised by sustainable banking group Triodos on behalf of social enterprise group Midlands Together. Midlands Together is an offshoot of the Bristol Together group which renovates properties employing short-term offenders. Midlands Together plans to buy, refurbish and sell approximately 15 properties a year and invest over £2m into the wages, training and mentoring of 100-150 ex-offenders over the five-year life of the bond.

SpainSIF, the Spanish social investment forum, has published a guide to Socially Responsible Investment. The 31-page guide provides an overview of the main principles, industry bodies and a glossary. Link

Private equity giant KKR has released its third annual Environmental, Social, and Governance (ESG) and Citizenship Report. KKR says its Green Portfolio Program, which uses an “environmental lens” to evaluate its portfolio companies – has achieved more than $644 million in cost savings and added revenue since inception in 2008. Link. Governance

There is still a “grey area” about the relationship between integrated reporting and other forms of reporting, such as statutory narrative reports and sustainability reports, says accountancy body the Association of Chartered Certified Accountants (ACCA). ACCA’s response to the International Integrated Reporting Council (IIRC) consultation on the framework to combine financial and sustainability reporting is called Understanding Investors: directions for corporate reporting. ACCA said: “Duplication must be avoided and [integrated reporting] needs to find a suitable accommodation with those other reporting requirements.

Lead plaintiffs the Pension Trust Fund for Operating Engineers in Alameda, California, and the Employees’ Retirement System of the Government of the Virgin Islands have seen their lawsuit relating to the Gulf of Mexico against Anadarko Petroleum “significantly narrowed” according to a Reuters report. The investors were entitled to sue the company over only a single “isolated” statement concerning the Macondo well disaster, US District Judge Keith Ellison in Houston said.

Governance advisory firm Institutional Shareholder Services (ISS) has advised its clients to vote against the re-election of four directors of US healthcare technology and drug distribution McKesson over persistent problems about the way it addresses shareholders’ concerns about executive pay. It follows criticism by the union-linked CtW Investment Group. McKesson holds its annual general meeting on July 31.

South Africa’s Public Investment Corporation (PIC), which manages the assets of the Government Employees Pension Fund (GEPF), has reportedly said that construction firms that have been fined for colluding to fix infrastructure tenders should claw back bonuses from the executives involved. The PIC’s Chief Investment Officer, Daniel Matjila, was quoted by the Business Times as saying there needed to be “some form of punishment” for the executives.

A row between shareholders and oil exploration company Gulf Keystone has broken out ahead of the company’s annual meeting on July 25, according to reports. New chairman Simon Murray will call in external pay consultants to review policies as he tries to deal with shareholders’ anger ahead of the meeting, the Financial Times reported. Fund firm M&G, which has just over 5% of the company, has proposed four directors for election.