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RI ESG Briefing, July 31: EIB announces another climate bond transaction

The round-up of environmental, social and governance news

Environmental

The European Investment Bank says has priced a SEK400m (€45.9m) “tap” of its SEK750m Climate Awareness Bond (CAB) maturing on July 24, 2020. The bond was placed with Scandinavian investors, the EIB says. It was the third Swedish Krona Climate Awareness Bond transaction of 2013. The sole lead manager for the transaction was Danske Bank. Link

Worldwide revenue from distributed solar power generation will reach $112bn (€84.6bn) a year by 2018, according to Navigant Research in a new report called Distributed Solar Energy Generation. The growth will be driven by feed-in tariffs and the commoditization of photovoltaic (PV) modules, along with innovative leasing programs for residential solar installations. It said distributed solar PV systems are expected to see double- and, in some countries, triple-digit growth over the next five years.

It’s been reported that China’s investment in renewable energy during the country’s 12th Five-Year Plan (2011-15) will reach 1.8trn yuan (€222bn). That’s in addition to 2.3trn yuan being spent on energy-saving and reducing harmful emissions, China Daily said, citing remarks from Xie Zhenhua, deputy director of the National Development and Reform Commission.

A European institutional investor has tendered a $75-100m core infrastructure mandate via the IPE-Quest asset manager search facility (search no. QN1320). The closing date is August 23. Link

Social

Dexia Asset Management, whose €380m sale to Hong Kong-based GCS Capital collapsed this week, says its socially responsible investment (SRI) assets under management (funds and mandates) have dipped to €16.66bn at the end of 2012 – from €18.24bn at the end of 2011. SRI assets account for 22.71% of total AUM, down from €23.4% a year before. The figures come in Dexia AM’s new Sustainability Report.

responsAbility Investments, the Switzerland-based microfinance specialist, has become a member of the Global Impact Investment Network’s (GIIN) Investors’ Council. The group was formed to accelerate learning about new investment opportunities, facilitate sharing of lessons learned, highlight and spread best practices, and enable opportunities for collaboration. Membership. Governance

The Ontario Securities Commission (OSC) has announced the start of a 60-day comment period on a proposal that would require Toronto-listed companies to provide disclosure regarding women on boards and in senior management. “This proposal will inform investors of the progress that Canadian companies are making in advancing the representation of women on their boards and in senior management,” said Maureen Jensen, Executive Director and Chief Administrative Officer of the OSC. The comment period will end on September 27 and the OSC will host a roundtable in the fall, with additional details to be announced shortly.

Staying in Canada, the Ontario Municipal Employees Retirement System (OMERS), which has more than C$60bn (€44bn) in assets, has reportedly emerged as a backer of a new Canadian stock exchange group. The Wall Street Journal said OMERS and telecoms firm BCE are backing the Aequitas trading platform unveiled by Royal Bank of Canada and others last month. The new venture aims to protect investors against “predatory and opportunistic trading” and restore the original purpose of an exchange – the efficient allocation of capital.

The National Association of Pension Funds, the UK trade body, has welcomed a Parliamentary report which called for clarity of the fact that dealing commissions should be used to fund long-term investment research, voting advice and stewardship. “The recommendation to emphasise that stewardship research can be paid for from dealing commissions is a significant step in the right direction that will help catalyse the market,” said Will Pomroy, NAPF Corporate Governance Policy Lead.

Two shareholder lawsuits brought against Royal Bank of Scotland (RBS) relating to its £12bn cash call in 2008 could cost the bank more than £4bn, according to media reports citing court documents. Reuters reported that an initial hearing occurred yesterday (Tuesday) at London’s High Court. The largest shareholder group, the RBoS Shareholders Action Group, includes over 100 institutional investors.

“Quadratic Vote Buying” has been proposed as a way to boost corporate governance by two University of Chicago academics, Eric Posner and Glen Weyl. They argue that shareholder voting is a weak and much criticized mechanism for controlling “managerial opportunism”, with shareholders often too uninformed to vote wisely. “We propose a new voting system called Quadratic Vote Buying (QVB), according to which shareholders are not given voting rights but may purchase votes, with the price of votes being a quadratic function of the number of votes purchased.” Link