RI ESG Briefing, June 12: $200bn investor coalition backs US enviro agency

Environmental

A coalition of 20 investors with a combined $200bn (€160bn) in assets under management has written to US Senators to uphold a recently established Environmental Protection Agency Clean Air Act Rule. The investors are urging the Senate to oppose an effort to prevent the EPA from implementing the Mercury and Air Toxics Standards for power plants. The letter was coordinated by Calvert Investments and other signatories include a number of fellow Investor Network on Climate Risk members such as Walden Asset Management, Domini Social Investments and F&C Management.

Bank of America has announced a new 10-year, $50bn environmental business goal to help address climate change, reduce demands on natural resources and advance lower-carbon economic solutions. The new goal, which becomes effective at the start of next year, follows the anticipated completion of the US banking giant’s current 10-year, $20bn green initiative.

A new report from environmental campaign group Greenpeace says investors in nuclear power are being sold “precarious and potentially damaging” investments because the industry’s risks are regularly being overlooked or underestimated. Toxic Assets: nuclear reactors in the 21st century was compiled with the help of BankTrack.

Social

A total of 35 financial institutions have now endorsed the Natural Capital Declaration, a commitment by financial institutions to work towards integrating natural capital considerations into their financial products and services. The latest to sign up include Italy’s Banca Monte dei Paschi di Siena, France’s Caisse des Dépôts group and Sumitomo Mitsui Trust Holding – the first Japanese endorser. Full list

ECPI, the Milan-based environmental, social and governance (ESG) ratings firm, has launched the first study on the sustainability of Italian companies. They rated fairly well in the corporate governance and markets categories but were below the European average elsewhere. Link

Ecclesiastical Investment Management, the funds arm of 125-year-old UK insurer Ecclesiastical says there are now more than 80 dedicated ethical and responsible investment funds in the UK, totalling over £11bn in assets under management. Link. Governance

The New York City Comptroller John Liu, acting on behalf of the five New York City Pension Funds, has filed a shareholder derivative action against retail giant Wal-Mart Stores over the recent Mexican bribery revelations. The funds allege that Wal-Mart’s officers and directors breached their fiduciary duty to the company and its shareholders by failing to properly handle credible claims of the bribery allegations and attempting to cover up details of the scandal.

The Manifest/MM&K Executive Director Total Remuneration Survey for 2012 has been launched – with the finding that remuneration committees and boards at companies on the benchmark FTSE100 “continue to award increases well above general pay increases and inflation”. The median increase in CEOs’ total pay in the past year was 10% at FTSE 100 listed firms.

The New York State Common Retirement Funds’ non-biding proposals to declassify the boards at clothing retailer Ann Inc. and health-care company Healthways Inc. gained overwhelming shareholder support (96% and 90% respectively), according to State Comptroller Thomas DiNapoli. “I am encouraged that the shareholders of Ann Inc. and Healthways Inc. have supported my efforts to make the directors of each company more accountable and fully expect that the boards will implement these proposals,” he said.

Fidelity Worldwide, BlackRock and Norges Bank Investment Management, the manager of the NOK3.5trn (€464bn) Norwegian Government Pension Fund, are the best investors at actively engaging with investee firms, according to the new Thomson Reuters Extel Awards. It surveyed 780 quoted UK and European companies, according to a report in the Financial Times.

Malaysia: Companies must “internalise” corporate governance and move beyond box-ticking, says the Securities Commission Malaysia regulator. “Companies need to move beyond what is mandatory and should internalise the values, spirit and purpose behind the regulations,” the SC said. The new Malaysian Code on Corporate Governance 2012 was introduced earlier this year.

A group of leading asset management firms in the UK are pushing banks and other large firms to overhaul their long-term incentive plans, according to reports. The group – which includes Fidelity, Standard Life Investments and Hermes Equity Ownership Services – want remuneration committees to model their policies on a new HSBC scheme, the FT reported.