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RI ESG Briefing, July 21: AP4, bcIMC, Denmark’s PKA, Eumedion, Hillary Clinton

The round-up of the latest ESG news

Environmental

The SEK310bn (€33.1bn) Swedish state buffer fund Fjärde AP-fonden (AP4) has invited proposals from asset managers for a global equities portfolio focused on “the global water scarcity challenge”. It said that management should be active, long only and long term focused, with the benchmark/universe being MSCI World. Questions and inquiries must be submitted by August 5.

The C$123.6bn (€87.5bn) British Columbia Investment Management Corporation (bcIMC) says it has committed approximately C$445m to two new agriculture fund investments in the past year, according to its latest annual report. Its renewable resources fund holds primarily core investments in timberlands and funds that focus on global timber and agriculture. It said: “Early performance for the new fund remains strong. Unaudited returns were 8.0% on a one-year basis for the period ended December 31, 2014.”

Danish pension scheme PKA has reaffirmed its commitment to an international project aimed at mobilising $100bn (€92bn) in private capital for infrastructure projects – including renewables – in developing countries, IPE reports. The Sustainable Development Investment Partnership (SDIP) was announced during a United Nations-sponsored Financing for Development conference in Addis Ababa, Ethiopia. The idea for SDIP was originally hatched at the Copenhagen climate summit in December 2009.

China has seen the launch of its first labelled green bond, with the wind energy firm Xinjiang Goldwind Science & Technology (Goldwind) selling $300m (€276m) worth of the debt. The three-year bond was assured by DNV GL, an Oslo-based consulting and software firm. According to press reports, Goldwind’s issue was nearly five times oversubscribed. In related news, US power firm SunEdison Inc. said its renewable energy affiliate TerraForm would issue another $800m worth of green bonds with a maturity of seven years. At the same time, SunEdison said it would sell part of its holding in TerraForm as part of an initial public offering (IPO) on the Nasdaq exchange. J.P. Morgan and Barclays are acting as the lead book runners for TerraForm’s IPO.

Social

Eumedion, which represents institutional investors’ interests in corporate governance in the Netherlands, has found that “more than one-third” of Dutch listed companies are working on preparations for changing over to Integrated Reporting. The International Integrated Reporting Council (IIRC) has welcomed the increased take up by Dutch firms

Magni Global Asset Management, the Paul Hamlyn Foundation, Carnegie Fonder AB and Hudson Clean Energy Partners are among new signatories to the UN-supported Principles for Responsible Investment (PRI).h6. Governance

US Presidential candidate Hillary Clinton says she is planning to outline a number of proposals this week – including reforming capital gains tax – to promote long term investment. The former Secretary of State, the frontrunner for the Democratic nomination for the 2016 election, said in a Q&A session on Facebook: “Later this week, I will be outlining a number of proposals, including capital gains reform, to promote long term investment that will strengthen companies, workers, and communities. The increase in short-termism has grown in urgency since 2008, and the urgency of our solutions has to match it.” Details of the proposals aren’t available but the remarks follow a speech she made at the New School for Social Research in New York last week in which she said the market “focuses too much on the short-term, like second to second financial trading, and quarterly earnings reports, and too little on long-term investments”.

The UK’s Financial Reporting Council has started an initiative to raise standards and promote the flexibility of its ‘comply or explain’ rule in the Corporate Governance Code. It announced the move in a letter to the European Commission about the EC’s Recommendation on the quality of corporate governance reporting. Link

Eurosif has released a position paper on country-by-country reporting (CBCR) in which it says that while it supports a mandatory, annual CBCR, for listed companies with data made public to a company’s stakeholders, including investors and shareholders, it should not be part of the planned revision to the Shareholder Rights Directive. The European Parliament recently voted on an amended draft of the directive, which proposed CBCR, which is currently only mandatory for banks and mining firms. But Eurosif has backed the argument that it could be “burdensome and onerous” for it to be obligatory for all listed companies. Position paper

US proxy firms Glass Lewis and ISS have joined Swiss peer Ethos in recommending that shareholders maintain their support of those board directors at Swiss chemicals firm Sika who oppose the firm’s takeover by French glass group Saint Gobain. This Friday (July 24), an extraordinary general meeting (EGM) is due to vote on a proposal from the controlling Burkard family, to have the anti-takeover directors replaced by the family’s candidates. Six out of nine directors, including Sika Chairman Paul Hälg, oppose it.

Toshiba’s chief executive and president Hisao Tanaka has resigned after the Japanese electronics company confirmed it had overstated its profits for the past six years, according to reports. He would be succeeded by chairman Masashi Muromachi, the BBC reported. It said an independent panel appointed said the company had overstated its operating profit by JPY151.8bn ($1.22bn).