RI ESG Briefing, July 29: PRI launches engagement on water risks in agricultural supply chains

Environmental

The Principles for Responsible Investment (PRI) has launched a new investor-led collaborative engagement focused on the water risks faced by companies in their agricultural supply chains. The initiative has released a research report on the issue, developed in collaboration with the World Wildlife Fund (WWF) and PwC Germany, highlighting the risks to investors and the companies they invest in, and guidance on engaging with companies on the issue. PRI signatories who wish to join the collaborative engagement should contact Paul Chandler, Manager of Investor Engagements, Environmental Issues at the PRI.

Swiss private bank J. Safra Sarasin, which provided €70m worth of loans to Windreich, has reportedly asked a German court to declare Willi Balz, founder and former CEO of the embattled German wind power firm, insolvent. The move is a result of Balz’s decision to use his personal fortune as collateral for the loan. J. Safra Sarasin is one of several creditors seeking €370m from the company, which itself has been put insolvency, according to the Frankfurter Allgemeine Zeitung. To salvage his firm, Balz recently proposed a sale of the rights to develop MEG 1, a 400MW wind park in the North Sea. But press reports said Windreich’s insolvency administrator believed the sale would not raise enough capital to save the firm.

Over the long term, coal mining companies may experience stranded assets as a result of carbon constraints, according to a report from ratings agency Standard & Poor’s. S&P has issued a 14-page study called Carbon Constraints Cast a Shadow over the Future of the Coal Industry, with contributions from James Leaton of the Carbon Tracker Initiative and Adeline Diab of Aviva Investors.

Social

A type of social impact bond to protect rhinoceros against poachers is being planned by the UK’s Zoological Society of London (ZSL) with $5m in support from the UN’s Global Environment Facility and the Royal Foundation of Duke and Duchess of Cambridge and Prince Harry. The ‘rhino impact bond’ aims to attract private sector investment alongside such public sector and charitable grants to “generate funding at the scale necessary to address the poaching crisis,” the ZSL said.

The Stock Exchange of Thailand (SET) says it will attempt to boost the social investment market in the country through events, lectures and workshops with investors and business sector members. SET Chairman Sathit Limpongpan said: “Social enterprises have been set up and operating successfully in Europe, England and Asia, for many decades. With synergy from the private sector, government and high net worth philanthropists, SET is determined to be a driving force behind the success in Thailand.”h6. Governance

The $13.9bn (€10.4bn) Los Angeles City Employees’ Retirement System (LACERS) has issued a request for information (RFI) for proxy voting services. It follows discussion about the “fees and terms of the current contract” with incumbent provider Institutional Shareholder Services, according to meeting minutes. It comes as LACERS’ proxy voting policy “is currently under review and is subject to change”. The deadline for responses is August 22.

The Public Investment Corporation, the South African state-owned asset manager which owns some 11% of the Johannesburg Stock Exchange, voted against the pay policies at 23 of the 59 (or 40%) companies that held AGMs in the most recent quarter, according to its voting records. And it voted against a motion at British American Tobacco on April 30 which would have let BAT make political donations. “The PIC has a concern which is ethical in nature regarding political donations in this sector,” it said.

Cheerios and Green Giant US food producer General Mills has joined advocacy group Ceres’ BICEP (Business for Innovative Climate & Energy Policy) initiative. BICEP was launched in 2008 with a core group of five companies, including Starbucks, Nike, and Timberland. “General Mills has long recognized the need to mitigate the risks that climate change presents to our planet, our business and each one of us. Science-based evidence underscores the urgency to take action and form effective and efficient climate and energy policies,” said Ken Powell, General Mills Chairman and CEO.
Meanwhile, Ceres’ President Mindy Lubber is due to be a witness before the US Senate’s Budget Committee today (July 29) at a hearing entitled ‘The Costs of Inaction: The Economic and Budgetary Consequences of Climate Change’.

The African Corporate Governance Network (ACGN), which launched last year, held one of its first meetings in Tanzania this month, where its chair Jane Valls stressed the importance of corporate governance to the continent due to the growing trend of inter-continental business transactions and the increase in the flow of foreign direct investment in Africa. The ACGN is made up of 13 institutes of directors including founding members from Mauritius, Kenya, Malawi, Mozambique, South Africa and Tanzania.

Advocacy group As You Sow’s shareholder resolution on Extended Producer Responsibility (EPR) at supermarket group Safeway attracted around 12% support at its annual meeting on July 25. And Green Century Capital Management’s motion on GMO labeling also attracted enough votes for it to return to the AGM agenda next year.

The California State Teachers’ Retirement System (CalSTRS) has reportedly urged PepsiCo to add Nelson Peltz of activist Trian Partners to its board. Trian, which CalSTRS has backed before in activist campaigns, has been trying to get the drinks and food group to split its snacks and beverage businesses.