RI ESG Briefing, July 22: CDP, South Pole, Sustainalytics, DEG, World Bank, Union Investment

The round-up of the latest ESG news


Not-for-profit Environmental data body CDP has partnered with sustainability group South Pole Group to deliver what is claimed to be the first ever global benchmark for corporate water management at 700 of the world’s largest companies. South Pole will act as CDP’s lead water scoring partner. Together, they will evaluate the water management practices of companies operating in 112 countries across the most water dependent industry sectors based on the strict application of CDP’s publicly available water scoring methodology.

Sustainalytics, the ESG research firm, says it is preparing to introduce a suite of carbon solutions in August, which will include carbon intensity data for 10,000 companies, carbon portfolio analytics (measuring the carbon intensity of investors’ portfolios), high-impact fossil fuel research (identifying companies involved in the most carbon-intense fossil fuels), and stranded carbon assets research (identifying those companies facing a higher risk of asset stranding).

DEG, the investment arm of German development bank KfW, has provided an undisclosed amount of financing for Mobisol, GmbH, a German solar firm that has helped electrify parts of Tanzania and Rwanda. In a statement, DEG said the financing entailed a convertible loan – that is to equity – to Berlin-based Mobisol as well as equity in the company. In the two African countries, Mobisol has already equipped more than 20,000 households with off-grid solar power systems.


The World Bank’s Board of Executive Directors has approved a new policy governing procurement in projects it finances. The new Procurement Framework will allow it “to better respond to the needs of client countries, while preserving robust procurement standards throughout Bank-supported projects”. The procurement system affects a portfolio of about $42bn in over 1,800 projects in 172 countries and the new framework will go into effect in 2016. “Value for money, sustainable development and integrity are the vision of the new approach,” the bank says.

Investment in environmental, renewable energy and climate related projects in Austria, France, Germany and the United Kingdom, as well as Armenia, Kazakhstan and across Africa, were amongst schemes that have been approved by the board of the European Investment bank. Amongst schemes approved were five expected to be supported under the new European Fund for Strategic Investments (EFSI) include the large scale roll out of smart meters to better manage energy use in the UK, lending to facilitate access to finance for small renewable energy projects in Germany and France, as well as upgrading inland waterways in the Netherlands.h6. Governance

Union Investment, the German asset manager that is a signatory to the Principles for Responsible Investment (PRI), has continued to expand its proxy voting for institutional clients as well as the volume of its sustainably managed funds, reporting double-digit increases for both. In its latest engagement report, Union says that on behalf of institutional clients, it voted at 1247 annual general meetings (AGMs) in 2014 – up almost 20% from 2013 – and engaged with corporate executives and boards 240 times. Turning to 2015 and 2016, Union also said in the report that beyond safeguarding labour rights in the supply chains of investees, it would engage with investees on preparedness for climate change, energy efficiency – particularly among airlines – and fracking. It said the latter was important to it as an investor both from an environmental standpoint and because of falling oil and gas prices.

The most common shareholder proposal topics in the US in 2015 have been political and lobbying activities (110 proposals), proxy access (108 proposals), and independent chair (76 proposals), according to law firm Gibson Dunn, citing ISS data. “According to data from Institutional Shareholder Services (“ISS”), shareholders have submitted approximately 943 proposals for 2015 shareholder meetings, which surpasses the total of 901 proposals submitted as of a comparable time last year,” the firm said in a note to clients. Link

Italy updated its corporate governance code on July 9, adding amendments focused on the need for more effective internal risk controls. The new code places a greater responsibility on the board to communicate and manage risks that could impact the medium- and long-term viability of the company, and also recommends that larger companies institute whistleblower protection policies as well as set up sustainability committees to improve risk oversight.

Several US firms are already disclosing their worker-CEO pay ratios before the Securities and Exchange Commission finalizes its rules, according to the Wall Street Journal. It said the companies sharing the information with investors voluntarily “don’t necessarily have the highest” ratios, as the CEOs of the companies involved did not have salaries higher than $8.5m. Examples included Houston-based oil and gas firm Noble Energy and energy company NorthWestern, the reported added.