RI ESG Briefing, July 30: Toshiba to be removed from DJSI World over accounting scandal

The round-up of the latest ESG news


Crédit Agricole CIB, HSBC and Rabobank have announced a new initiative to boost investment in social and sustainability projects by publishing a Social Bond and Sustainability Bond Appendix (‘SSBA’) designed as a proposed appendix to the Green Bonds Principles (GBP) launched in 2014. This initiative is intended to help issuers and socially-engaged investors with voluntary guidelines for the development and issuance of Social and Sustainability Bonds, encouraging transparency, disclosure and integrity in the development of these new markets. This SSBA will be submitted to the Executive Committee of the GBP Executive Committee for its consideration. Link

SRI firm Trillium Asset Management has urged fellow shareholders in J M Smucker to vote for a proposal about renewable energy at the Ohio-based food firm it filed with fellow firms Green Century, Clean Yield and Calvert. They want the company to issue a public report by January 2016 analyzing and proposing how the company can increase its renewable energy sourcing and/or production. Trillium added that proxy advisory firm Institutional Shareholder Services has recommended a vote in favor of the proposal saying it would “allow shareholders to better assess the company’s GHG emissions reduction efforts”. The board is resisting the motion, saying additional reporting is not “necessary or appropriate”.

French renewable energy firm Akuo Energy has issued a €34.4m corporate bond which adheres to the Green Bond Principles (GBP). Proceeds for the bond, underwritten by French financial institutions Natixis and Octo Finances, are to finance renewable energy projects developed by the company. Indeed, Akuo said in a statement that consistent with GBP, it would report to investors how it is spending the proceeds as well as disclose the number of tonnes of carbon emissions its projects help to avoid. Including this latest issue, the firm has raised €84m with its green bonds. Announcement


The Chartered Professional Accountants of Canada’s (CPA Canada) latest briefing, An Evolving Corporate Reporting Landscape: A Briefing on Sustainability Reporting, Integrated Reporting, and Environmental, Social and Governance (ESG) Reporting, has highlighted the voluntary (and in some instances mandatory) adoption of ESG, Integrated and Sustainability reporting internationally as one of the evolving trends on the ‘corporate reporting landscape’. The briefing is aimed at preparers and reporting teams, boards of directors, audit committees, investor relations officers, legal counsel, practitioners and analysts, the body says.h6. Governance

Toshiba Corporation will be ejected from the Dow Jones Sustainability World Index (DJSI World) on August 3 following the long-term accounting scandal that emerged at the Japanese electronics giant earlier this month. Toshiba had been a member of the index since 2000. In a statement, Standard & Poor’s and RobecoSAM, which jointly run the index, said the scandal prompted a review of Toshiba by the Dow Jones Sustainability Index Committee (DJSIC). “The DJSIC ultimately decided to remove the company from the DJSI World and the DJSI Asia Pacific. The stock will be removed after the close of July 31, 2015, thus making the removal effective on August 3, 2015,” they said

A judgment is expected tomorrow (July 31) in the case between advocacy group the Australasian Centre for Corporate Responsibility (ACCR) and the Commonwealth Bank of Australia. ACCR launched a legal challenge against the bank hoping to improve the clarity in Australian law of shareholders’ rights to have a say in how their companies are run. The ACCR’s barristers have argued that the ultimate rights in a company are held by shareholders. The case was heard on June 1 at the Federal Court in Melbourne before Justice Davies. Link

The Securities and Exchange Commission (SEC), the US financial regulator, says it is to hold an Open Meeting on August 5 to consider whether to adopt a rule requiring public companies to disclose the ratio of the annual total compensation of the chief executive officer to the median of the annual total compensation of the company’s employees as required by the Dodd-Frank Act.

Cisco, the California-based tech firm, is facing pressure, including a shareholder resolution to be discussed at its next annual meeting, to sign up to the Holy Land Principles – an eight point corporate code of conduct for US companies operating in Palestine and Israel. Fr. Sean McManus, founder of the principles, believes that universal adherence to the guidelines would bring the 545 American companies based in the region in line with United Nations Guiding Principles on Business and Human Rights (UNGPs) or ‘Ruggie Principles’.

Oversight of the asset management industry should be “strengthened and expanded” according to two senior International Monetary Fund figures. “Securities regulators should shift to a more hands-on supervisory model, strengthen their own risk analysis capacity, and conduct stress tests,” said Gaston Gelos, Division Chief of the Global Financial Stability Analysis Division at the IMF and his colleague Hiroko Oura writing in a personal capacity on VoxEU.org, the Centre for Economic Policy Research’s policy portal.