RI ESG Briefing, July 3: US water utility ‘plans $300m, 100-year green bond’

Environmental

The District of Columbia Water and Sewer Authority in Washington DC is reportedly preparing to issue a $300m, 100-year green bond. The bond is being arranged by Goldman Sachs and Barclays, said the Wall Street Journal, citing sources familiar with the matter. The proceeds will help to build a drainage system called the DC Clean Rivers Project, it added.

Italian waste, water and energy utility Hera has issued what is believed to be Italy’s first green bond, a €500m euro 10-year note, with a coupon of 2.375%. The loan will be used to finance sustainability projects, including clean air, waste and renewables projects for C02 emissions reductions. Seven banks ran the bond book: Banca IMI, BNP Paribas, Barclays, Crédit Agricole, Deutsche Bank, Mediobanca and UniCredit Bank.

Meanwhile, advocacy group the Climate Bonds Initiative says labelled green bonds issuance in 2014 so far has just reached $20.121bn – compared to $11bn for the whole of 2013. It comes as Barclays has teamed up with MSCI to launch a new Green Bond Index, expanding on their Environmental, Social and Governance (ESG) fixed income benchmark index family launched in June 2013.

A fund controlled by US asset management titan BlackRock has bought the 4.5MW solar project at Goonhilly Downs in Cornwall, western England, from Renewable Energy Generation Ltd. (REG) for up to £5.7m (€7.2m). The scheme, located adjacent to the long-standing REG-operated wind farm, was constructed by juwi Renewable Energies; it’s the third such transaction under REG’s partnership with BlackRock established in 2013. Link

The European Commission passed legislation on July 2 to review its recycling and other waste-related targets laid out in the previous EU Waste Framework Directive, the Landfill Directive, and the Packaging and Packaging Waste Directive. The aim of the new proposals were to help turn Europe into a circular economy, boost recycling, secure access to raw materials and create jobs and economic growth. It said the review sets ambitious targets and outlines the instruments to achieve and to monitor them. Link

Social

The Business Benchmark on Farm Animal Welfare has launched its consultation on the proposed criteria and scope of companies for inclusion in the 2014 Benchmark. The closing date for comments is July 24.

The British Medical Association, the trade union and professional association for doctors in the UK, has voted to divest from fossil fuel firms on the grounds they pose human health risks. A divestment motion was passed at the body’s annual meeting last month, with members agreeing to ditch the BMA’s investments in oil, gas and coal and move towards clean energy investments. The risk of stranded assets was also a factor.h6. Governance

The Australian Council of Superannuation Investors (ACSI) has released its annual review of corporate sustainability disclosure – and found that a “disappointing” 40%-plus of companies in the S&P/ASX200 index still rate in the two lowest categories (‘basic’ and ‘no reporting’) for sustainability reporting. ACSI Chief Executive Gordon Hagart said companies need to not just explain the risks relevant to them and their industry – but to demonstrate how they are managing them.

Sports retailer Sports Direct’s controversial employee bonus scheme has been approved by investors at the UK group’s annual meeting by a 60% margin, according to reports. Before the vote, the Association of British Insurers advised investors to vote against the scheme and it was expected that some 60 UK local authority pension funds would also vote against it. Unusually, employers’ group the Institute of Directors had also opposed the scheme. After the AGM, it said: “Today’s vote is not a ringing endorsement for the governance set-up at Sports Direct.”

Shareholders of the Panera Bread Company and members of the Interfaith Center on Corporate Responsibility (ICCR) have welcomed the US café chain’s decision to develop a comprehensive Food Policy which includes a specific commitment to reduce the environmental and social impacts of sourcing palm oil and its derivatives. Panera is among the first restaurant chains to make this commitment. Separately, Trillium Asset Management, withdrew its shareholder proposal at Panera following a commitment from the company to publish a sustainability report by December 1, 2015.

The Securities and Exchange Commission (SEC), the US financial regulator, has issued an advisory ‘staff legal bulletin’ addressing some of the common questions raised about proxy advisory firms. It looks at investment advisers’ responsibilities in voting client proxies and retaining proxy advisory firms and the availability and requirements of two exemptions from the federal proxy rules that are often relied upon by the firms.

The Canadian government’s advisory council looking at how to increase gender diversity on corporate boards has recommended that women make up 30% of corporate boards within five years. It also calls for a ‘comply or explain’ approach to persuade listed firms to meet the goal.

Unigestion, the boutique asset manager with £9.3bn of assets under management, is to incorporate data from ESG research house EIRIS into its equities investment process. The research will assist with identifying risks, including how well companies are managing material ESG issues.