RI ESG Briefing, July 9: New York Common Fund puts extra $50m with Generation

Environmental

Etic, the French ethical property company founded by the UK’s Ethical Property group with a significant investment from investors including PhiTrust Partenaires, the social investment arm of the French SRI manager, has begun building its first environmentally friendly office building for social businesses in Montreuil in the Paris suburbs. The 1,600 m2 office building will be shared by about 50 social businesses and associations and its opening is scheduled for 2015.

Solar venture capital investments increased to $189m in 19 deals in the second quarter of 2013 compared to $126m in 26 deals in the previous quarter, according to analysis from clean energy consultants Mercom Capital. It said solar downstream companies received most of the funding with $128m.

The German Investment Corporation (DEG) is set to do €1.4bn worth of new business this year, down from €1.8bn last year and €1.6bn in 2011. Beyond 2013, DEG said it would grow its new business by 10% annually and its funding portfolio – currently at around €6bn – by 7% annually. A wholly-owned unit of German state-owned development bank KfW, DEG funds the following things: economic development in developing regions like Africa and Latin America; small-to-midsize enterprises (SMEs); climate protection; risk capital; and German firms active in developing regions. The DEG’s funding comes in the form of loans, loan guarantees, mezzanine finance and equity. DEG’s annual report (German)

Social

One of the world’s first social stock exchanges, The Impact Exchange, was launched on the Stock Exchange of Mauritius last month (June 16) with a purview of small social businesses in Asia and Africa. The exchange will list social enterprises that meet social and environmental criteria set by its owners, Singapore-based Impact Investment Exchange Asia (IIX) and the Stock Exchange of Mauritius (SEM). All companies that list will need an authorized report on its social impact. Like the Alternative Investment Market (AIM) in London, the new exchange is a separate exchange on the SEM platform. Professor Durreen Shahnaz, Founder and Chairwoman of IIX, said the partnership was “an important step in consolidating the interest from impact investors globally to two regions that have the most potential to impact millions of lives for the better.”h6. Governance

The $160.4bn (€125.4bn) New York State Common Retirement Fund says it has made an additional $50m allocation to incumbent asset manager Generation Investment Management, the sustainability boutique founded by former US Vice President Al Gore and ex-Goldman Sachs Asset Management CEO David Blood. The allocation, funded on May 8, adds to an existing $520.9m the fund has with Generation.

Broadridge Financial Solutions, the proxy voting processing firm, and consulting firm PWC’s Center for Board Governance have released the second edition of their ProxyPulse report, proving data and analysis on key shareholder voting trends and behaviours. It encompasses 2,858 shareholder meetings, five times more than the first report. Link

The House or Representatives in the US has voted overwhelmingly against a proposal on auditor rotation that would have obliged companies to switch accountants every few years. The idea, the brainchild of the US Public Company Accounting Oversight Board, which had sought to mitigate accounting scandals, had met with heavy criticism and lobbying from the accounting and financial industry.

Calvert Investments, the US sustainable fund management firm, has reacted to the U.S. District Court’s decision in the case of the American Petroleum Institute vs. the Securities and Exchange Commission case. The court had found that it was not necessary for oil and mining payment disclosures to be made public, which Calvert says “appears to restrict the provision of material information to investors”. Calvert, which was among investors representing more than $1trn in assets which had backed the SEC, said it would continue to support the SEC’s ability to compel disclosures that protect the interests of investors.

New academic research has found that proxy advisory firms have a “key economic role” in processing a substantial amount of executive pay information on behalf of institutional investors – “hence reducing their cost of making informed voting decisions”. The findings come in a paper called Shareholder Votes and Proxy Advisors: Evidence from Say on Pay prepared by Yonca Ertimur at the University of Colorado at Boulder, Fabrizio Ferri of the Columbia Business School and David Oesch of the University of St. Gallen.