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RI ESG Briefing, June 12: Freeport-McMoRan facing ESG shareholder resolutions

The round-up of environmental, social and governance news

Environmental

The Institutional Investors Group on Climate Change (IIGCC), which represents investors with a combined €7.5trn, have welcomed a report by the International Energy Agency setting out measures to reduce emissions and limit temperature rises up to 2020, the year a new international agreement is due to come into force.

Allianz Capital Partners (ACP), the renewable investment unit of German insurer Allianz, has acquired a 72MW wind park from Swedish renewable project developer O2 in the northern part of the country. The Maevaara wind park is to be completed by 2014, and O2 will be retained to operate it. A buyer for the wind park’s electricity has also been found: The US Internet firm Google, whose Finnish subsidiary will use it to power a data centre for 10 years. Financial details were not disclosed, but ACP said the purchase of Maevaara brought its total investments in renewable technology to €1.5bn. Link

Low Carbon Accelerator has convened an Extraordinary General Meeting (EGM) for July 1. Shareholders will consider the proposed cancellation of the clean energy investment vehicle’s listing on the AIM exchange and the voluntary winding up of the company. It is anticipated that cancellation will take effect on July 2.

Social

Two foundations linked to German carmaker BMW have tasked Oekom research, the Munich-based ESG research firm, to conduct a sustainability annual review of their holdings. The foundations have €60m in bonds, convertible bonds and cash, with portfolio management handled by BMW’s finance department. Niklas Ruf, project manager at the Eberhard von Kuehnheim foundation, said the review could result in companies being engaged with or excluded. Oekom is also advising on the selection of future sustainable investments. The other BMW foundation is named after Herbert Quandt, the industrialist whose descendants are still the largest BMW shareholders.

Norwegian State Secretary Hilde Singsaas has confirmed that a review of the responsible investment activities of the $740bn Norwegian Government Pension Fund by a new Strategy Council will be submitted in October. Speaking at a Responsible Investing Summit at Cambridge Judge Business School, Singsaas said: “We have also asked the Council to examine how the collective resources and expertise in the Ministry of Finance, the Council on Ethics and Norges Bank can best be utilized to strengthen the work on responsible investments still further.” She said the Council may propose changes to strengthen the work on responsible investments, including operational and institutional changes.h6. Governance

The New York State Common Retirement Fund is calling for a director with environmental expertise at mining company Freeport-McMoRan Copper & Gold. The proposal is due to be voted on at the company’s annual meeting on July 16. Other shareholder resolutions include independent chairman (filed by: the AFSCME Employees Pension Plan), board diversity (New York City Pension Funds) and special meetings of stockholders (California State Teachers’ Retirement System). The company is opposing all the resolutions. Proxy

The European Parliament is set today (June 12) to vote on a stringent new payment disclosure regime for the extractive industries. Under proposed new transparency requirements, companies active in the extractive or logging industries will have to publish an annual report outlining the payments made to governments, at both the country and project-level. MEP Arlene McCarthy, the Parliament’s ‘rapporteur’ for the new Transparency laws, said: “This vote is history in the making.”

Douglas Ferrans, Chairman of the UK Investment Management Association (IMA), has told an IMA dinner that the fund management industry needs to tackle the challenge of effective engagement with companies in which it invests. He said: “There is a very mixed approach in this area among investment management firms…However, as an industry, this is an area that cannot and should not be ignored.” IMA Chief Executive, Daniel Godfrey, recently bought together the buy-side trade associations to consider options to improve and extend collective engagement – as suggested in the Kay Review – to support companies in delivering long-term and sustainable returns. The results are expected shortly.

MSCI ESG Research has launched a new range of Thematic Research Reports. They will form part of the MSCI ESG Intangible Value Assessment (IVA) subscription and are available on MSCI ESG Manager. It said: “Environmental, social and governance (ESG) macro trends are shaping our future and may become material issues for companies and investors alike.”

The Local Authority Pension Fund Forum (LAPFF), which represents 56 public sector pension funds in the UK, is advising its members to oppose the remuneration report and long-term incentive plan at marketing giant WPP. LAPFF said that the “quantum of payments made to executives, and potentially payable in future, is considered excessive”. WPP holds its AGM on June 12.

Security company G4S was bombarded with accusations at its annual general meeting (AGM) last week. The Financial Times reported shareholders had a barrage of questions for the board on a range of social issues.