RI ESG Briefing, June 10: Sweden calls on shareholders to drive board gender balance

The round-up of ESG news


The first ever green bond to be listed on the Johannesburg Stock Exchange – a R1.46bn (€100m) offering by the City of Johannesburg – was 150% oversubscribed. The proceeds for the bonds, priced at 185 basis points above the R2023 South African government bond, will be used to fund green initiatives within South Africa’s largest city. “The green bond will provide the city with a funding source to improve and expedite the implementation of its climate change mitigation strategy, a low carbon infrastructure, minimal resource reliance and increased natural resources,” said Johannesburg Mayor Parks Tau.

Babson Capital Management, the funds group with over $198bn in assets under management that’s part of the MassMutual Financial Group, has acted as agent for $100m of growth capital put together for biomass firm Greenleaf Power. The proceeds will be used to fund acquisitions by Greenleaf, which currently runs five biomass facilities, representing approximately 145MW, and which is a portfolio company of private equity firm Denham Capital. Link

The Organisation for Economic Co-operation and Development (OECD)/International Energy Agency (IEA) Climate Change Expert Group (CCXG) has published a paper called Scaling up and Replicating Effective Climate Finance Interventions. It looks at how to mobilize private climate finance through the scaling-up and replication of climate finance interventions. The paper examines the need for increased climate finance as well as for commitments by developed countries to mobilize $100bn by 2020 to meet the climate-related needs of developing nations. Link


The UK’s latest Social Impact Bond will be the first to fund foster placements for children in residential care. It has been commissioned by Manchester City Council and will be run by Action for Children and funded by the Bridges Social Impact Bond Fund – which will provide £1.2m working capital for the scheme. Andrew Levitt, Investment Director at Bridges Ventures, said the deal was “an excellent opportunity to support a high social impact intervention benefiting a vulnerable group”.

The Children’s Investment Fund Foundation (CIFF), the body set up by philanthropist and hedge fund manager Chris Hohn, will invest $25m in the GAVI Alliance, the immunistion charity, to protect girls and women in developing countries from the leading cause of cervical cancer. The funding will be matched by the UK’s Department for International Development through the GAVI Matching Fund. Meanwhile, the Daily Telegraph has reported that Hohn has cut his charitable donations to the fund after divorcing his wife Jamie Cooper-Hohn – who runs CIFF – in 2013.h6. Governance

The Swedish Corporate Governance Board has presented tighter regulation to its Corporate Governance Code – with the aim of improving the gender balance on the boards of listed companies. “We want shareholders to drive the development towards a 40% share for the least represented gender on listed company boards by 2020,” said Arne Karlsson, the Board’s Chair. Among the initiatives are for shareholder-led nomination committees to be required to analyse the board evaluation in a gender balance perspective, explain and justify their proposed candidates and report to the AGM on how they have worked to try to achieve gender balance. The new rules come into force no later than January 1 2015. Link

New academic research using data provided by the Canadian Coalition for Good Governance (CCGG) has shown that major large institutional shareholders have had significant impact in convincing Canadian companies to adopt good governance practices. The Globe & Mail reported that the Rotman School of Management’s Alexander Dyck and Craig Doidge found firms were far more likely to adopt reforms when they have been lobbied privately by the CCGG. The findings were presented at the coalition’s annual meeting in Toronto.

Sustainable fund firm Australian Ethical has issued a response to criticism from the head of extractives trade body the Minerals Council of Australia about moves by investors to divest from fossil fuels. “When the very existence of the industry that you represent is ethically questionable, it appears the only form of defence is attack,” said MD Phil Vernon – in reaction to remarks made by the Council’s CEO Brendon Pearson.

Campaign group ShareAction has called on retail investment firm Hargreaves Lansdown to reverse its decision to charge customers to vote their shares at company meetings. ShareAction CEO Catherine Howarth said it would be a barrier to a “fundamental element of the UK’s corporate governance system”.

The Appleseed Fund’s shareholder proposal calling for sustainability reporting at drilling firm Nabors Industries – including a description of goals for the reduction of greenhouse gas (GHG) emission, water usage, and adverse environmental impacts of operations – gained 36.9% support at the company’s AGM on June 3. The company had opposed the motion, saying it would not be a productive use of corporate resources or in the best interest of the company or its shareholders. US pension giant CalPERS said its proposal at Nabors calling for a change in its proxy voting methodologies gained majority support. Anne Simpson, CalPERS’ Director of Global Governance said: “This sends a clear signal to Nabors, and other companies with similar provisions, that it’s time to end what some view as vote rigging.”