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RI ESG Briefing, July 5: Investor Confidence Project, ACSI, Sustainalytics-Cass, ERAFP, SEC

The round-up of the latest ESG developments

Environmental

The Investor Confidence Project (ICP) Europe has launched its new Investor Ready Energy Efficiency certification. This new certification for commercial and multifamily residential buildings is awarded to retrofit projects that follow ICP’s framework, and provides investors with more confidence in financial and environmental results. ICP Europe is a sister project of the Investor Confidence Project launched five years ago in the US by Environmental Defense Fund. Link

A group of environmental organisations has sent a series of open letters to major banks involved in granting over €3bn in loans to Czech energy company EPH since 2012. The letters call attention to the role of these banks in financing the expansion of EPH into Europe’s old fossil fuel assets to the point where the company is set to become the third-most polluting utility on the continent, despite only having existed for seven years.

The U.S. Virgin Islands’ Attorney General Claude Walker has reportedly agreed to withdraw a wide-ranging subpoena against oil major Exxon Mobil amid a push by state prosecutors to look into whether the company misled stakeholders about climate change risks. “After conferring on the matter, the parties mutually agreed that Attorney General Walker will withdraw the subpoena and Exxon Mobil will stipulate to the dismissal without prejudice of this action,” Reuters reported a filing in U.S. district court as saying.

Social

Harvard Business School is reportedly launching a new impact investment course dubbed Creating Shared Value and Impact Investing. HBS offered its first impact investing-focused course in 2011.

Financial data and news giant Bloomberg has released its first function dedicated solely to ESG analysis. It’s a single security page, aggregating all critical company reported and third party ESG data and ratings, and providing links to charting and news.

Is foreign bribery an attractive investment in some countries? That’s the question being posed by the OECD, which in a new chapter of its OECD Business and Finance Outlook 2016 says that “in many jurisdictions with weak sanctions, foreign bribery may be an attractive investment”. The chapter paints a picture of fragmented deterrence across the 41 Parties to the Anti-Bribery Convention. The OECD said: “This patchwork of incentives and disincentives for foreign bribery is explored using simulations of ‘net present value’ for ‘investments in foreign bribery’ under assumptions of both certainty and uncertainty.” The simulations draw on sanctions data produced by the OECD Working Group on Bribery.h6. Governance

The Australian Council of Superannuation Investors (ACSI) has released its annual review of corporate sustainability disclosure – and found that 71 cents in every dollar invested in the ASX200 is now invested in companies shown as reporting on ESG to a ‘leading’ standard. And 90% of ASX200 companies provided some level of reporting on sustainability factors in their 2015 public disclosures, with the most improved sectors being utilities, gas, and energy distribution companies.

A new study by ESG research firm Sustainalytics and London’s Cass Business School has shown how engagement and ESG integration are interrelated. To better understand various ESG engagement approaches, the partners conducted 36 in-depth interviews with institutional investor representatives across France, the Netherlands and the UK. The findings reveal that managing the environmental and social impacts of engagement requires more attention. While progress is being made, there is the need for greater consistency in the scope, content and quality of investors’ ESG engagement disclosures across all three countries.

ERAFP, the 100% SRI French state pension fund (the Établissement de retraite additionnelle de la fonction publique) has tapped Ernst & Young to help it review the risk indicators and performance attribution of external investment firms. The contract award was announced on the EU’s TED tender database.

Corporate governance in ASEAN countries collectively continues to improve, with international best practices being incorporated into national corporate governance blueprints and strategies – according to the fourth round of the Association of Southeast Asian Nations (ASEAN) Corporate Governance initiative of the Asian Development Bank and the ASEAN Capital Markets Forum, More than 500 top publicly listed companies from six ASEAN countries were assessed as to rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, and responsibilities of the board. Link

A discussion of the state of sustainability reporting will be held by the Securities and Exchange Commission’s Investor Advisory Committee on July 14 in Washington. The committee, whose members include figures such as CalSTRS’ Anne Sheehan (Vice Chairman) and Domini Social Investments’ Adam Kanzer, was initiated under the Dodd-Frank Act and has in the past looked at issues such as materiality and corporate disclosure. Its final meeting this year is tentatively scheduled for October 6.