RI ESG Briefing, July 28: Bank of America, FTSE Russell, ACCR, Bursa Malaysia, ABN AMRO

The round-up of the latest ESG news


FTSE Russell has launched a global index suite that excludes coal. The index firm said the new FTSE All-World ex Coal Index Series would omit companies that have certain exposure to coal or general mining companies with proved and probable coal reserves. “The new index series will assist market participants in managing their portfolio exposure linked to fossil fuels,” it said. The firm is also developing custom “ex coal solutions” in line with forthcoming legislation in Norway and California. The new offerings follow on from last year’s launch of the FTSE All-World ex Fossil Fuels Index Series.

The Australasian Centre for Corporate Responsibility (ACCR), the Canberra-based shareholder advocacy group, is reportedly set to lodge resolutions for listed energy group AGL Energy’s annual general meeting. The Sustainability Report, citing ACCR Executive Director Caroline Le Couteur, said the motion, demanding the company set a quantitative target for annual reductions on emissions from power generation activities, would be lodged on July 29.

Bank of America has pledged to increase its current environmental business initiative from $50bn to $125bn in low-carbon business by 2025 through lending, investing, capital raising, advisory services and developing financing solutions for clients around the world. “We are putting our financial capital, our intellectual capital, and the strength of our partnerships to work to help create a better future for all of us,” said CEO Brian Moynihan. The bank has provided more than $39bn in financing for low-carbon activities since 2007, including $12bn in 2014 alone. Link


Dutch bank ABN AMRO has become the first bank to commit to reporting on human rights using the UN Guiding Principles Reporting Framework. It is the sixth early adopter company to make this public commitment since the UNGP Reporting Framework launched in February 2015. ABN AMRO joins Unilever — the first adopter — as well as Ericsson, H&M, Nestlé and Newmont. Link

Bridges Ventures, the UK-based social investor, has said that two of its early Social Impact Bonds are “over-delivering”. “Two of the early social impact bond investments by the Bridges’ Social Sector Funds became the first in the world to beat their outcomes targets, repay all the capital raised from social investors and be recommissioned to deliver a second programme,” said Managing Partner & Co-Founder
 Philip Newborough. “In light of the scepticism that still exists about SIBs in some quarters, Career Connect and Teens & Toddlers provide timely proof that the model can work.”h6. Governance

The Bursa Malaysia exchange is seeking feedback on a consultation paper on a proposal to enhance sustainability practices and disclosures. The proposal comprises a new reporting framework for sustainability which involves changes to the Listing Requirements as well as a Sustainability Reporting Guide. In addition the exchange will also offer other guidance and training to listed issuers to assist them to improve sustainability performance and reporting. It also plans to issue a toolkit which will comprise “practical tools” to augment the Sustainability Reporting Guide. Announcement

Shareholders headed by lead plaintiffs the Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California have obtained a $388m recovery relating to nine 2007 residential mortgage-backed securities (MBS) offerings issued by investment bank J.P. Morgan. Law firm Robbins Geller Rudman & Dowd said it brought to a successful conclusion one of the last remaining MBS purchaser class actions arising out of the global financial crisis. “The settlement represents, on a percentage basis, the largest recovery ever achieved in an MBS purchaser class action,” the firm said.

Citizens United, the US conservative group famous for its role in the landmark 2010 Supreme Court ruling on political spending, has had a bid to block disclosure about its donors rejected, according to reports. Reuters said US District Judge Sidney Stein in Manhattan refused to impose a preliminary injunction to stop New York Attorney General Eric Schneiderman from requiring registered charitable organizations such as Citizens United from disclosing details about large donors. Lawyers acting for Citizens United were quoted as saying Schneiderman was “acting unconstitutionally and beyond his authority.”

There’s been a call for a simple European investment product with a “long-term perspective in terms of asset allocation” and reflecting the long-term investment horizon of pension savings. It comes from Allan Polack, chief executive of Danish pension fund PFA in an editorial in the Financial Times. Writing with Karel Lannoo of the CEPS think tank and Nordea Wealth Management advisor Ole Stæhr, Polack argues the mooted product “should be portable and have the same product characteristics across EU countries”. They add: “It would not be redeemable on a daily basis and early withdrawals would be discouraged.” Link

The Australian Council of Superannuation Investors (ACSI), an independent body providing ESG related research and advice to member funds, has found that barely a third of Australia’s largest miners, banks and energy companies publicly disclose any qualitative or quantitative information on the effectiveness, or otherwise, of mental health and safety related programs. “This is in stark contrast to the very high disclosure rates for physical health and safety outcomes,” ACSI says. The research report, commissioned by ACSI from research group CAER, aims to start a conversation among investors and companies on the topic. Link