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RI ESG Briefing, June 14: AP2, BNP Paribas, CalSTRS, WWF, New York City Pension Funds, Canada’s RIA

The round-up of the latest ESG developments.

Environmental

BNP Paribas Foundation has committed a further €6m to its Climate Initiative programme, enabling it to support eight new international research projects between 2017 and 2019. The initiative, launched in 2010 and which currently supports 10 projects globally, aims to enhance understanding of climate change and its environmental effects. The new tranche will support projects across the globe from the East Antarctic to the Tropics.

CalSTRS has taken action to divest all of its non-US thermal coal holdings, aligning with its “long-term global perspective” and its fiduciary duty. “The motives driving today’s decision to divest the fund from all non-U.S. thermal coal, while reflecting the portfolio risks, is also a statement from the board to the global marketplace that we will not tolerate the deleterious effects of climate change, regardless of the recent actions taken by the federal government,” said Investment Committee Chair Harry Keiley.

A US coalition of investors, businesses, elected officials, and academics representing $6.2tn have declared their intention to continue to ensure that the US remains a global leader in reducing carbon emissions. The We Are Still In initiative, applauded by international leaders, was formed in response to the Trump administration’s decision to pull out of the Paris Climate Accord.

China is reportedly set to introduce mandatory environmental disclosure by listed companies amid concerns over companies’ adherence to environmental standards. The agreement between the country’s Ministry of Environmental Protection (MEP) and China Securities Regulatory Commission, which was signed this week, comes in the wake of a report by the MEP that found 70% of companies inspected were in violation of the country’s environmental standards.

Social

The New York City Pension Funds has become the first major public pension system in the US to completely divest from private prison companies. It said it follows reported incidents of alleged human rights abuses across the private prison industry, posing long-term reputational and financial harm. “With Donald Trump in the White House, we’re seeing more and more industries try to profit from backwards policies at the expense of immigrants and communities of color. But because of this major new step, we are demonstrating that we will not be complicit. We are standing up for what’s right,” New York City Comptroller Scott Stringer said.

Rabbobank and Dutch based fund Aqua-Spark, which specialises in sustainable aquaculture projects, have contributed to a €45m investment in Protix, a developer of ‘low-impact’ insect-based animal feeds.

Impact Investing Australia has entered into a partnership with Responsible Investment Association Australasia (RIAA) to develop the impact investment market in the region. The RIAA has established the Impact Investment Forum that will act as a hub and develop market based data and practice.h6. Governance

Swedish state fund AP2’s Female Representation Index has celebrated its 15th anniversary with the news that the proportion of women on the boards and in executive positions at listed companies continues to increase and Large Caps are leading the way. In the 15 years that AP2 has published the index, the proportion of women on boards has increased by 26.1 percentage points, it said. The latest version shows that the proportion of women represented on the boards of companies listed on NASDAQ Stockholm continues to increase and is now at 32.2% compared with 30.7% the previous year.

Global environmental campaign group WWF has called upon all banks to do more to protect UNESCO World Heritage sites in a new report. The report offers financial institutions guidance on how they as providers of capital can play their part in safeguarding globally significant sites. WWF’s report also highlights that despite protected status nearly half of World Heritage sites are threatened by industrial activity.

A shareholder class action lawsuit has been brought against Brazilian meat processing company JBS citing the negative effect on the company’s share price that allegations of bribery – in relation to the selling of rotten meat – and subsequent police raids have caused. Holders of shares in JBS between June 2015 and May 2017 may apply to be a lead plaintiff of the Class by 21 July 2017. RI reported in May that Hermes Asset Management, the £28.5bn fund-manger wholly owned by the BT Pension Scheme, had pulled its investments in the company the wake of the scandal.

Canada’s Responsible Investment Association (RIA) has highlighted an “RI awareness gap” in its latest annual Investor Opinion Survey – with 77% of investors polled stating an interest in RI but a staggering 73% claiming to know very little about it. The survey of 1,084 Canadian investors also found that 82% of investors would like to dedicate a portion of their portfolio to RI.

US oil giant Exxon Mobil has been accused of misleading investors on climate change by New York’s Attorney General Eric Schneiderman, Reuters reports. The accusation centres on the validity of statements made by Exxon on the company’s assessment of future risks associated with likely environmental regulation. Schneiderman claimed in a court filing that he had evidence of “potential materially false and misleading statements by Exxon”. The news comes in the same week that shareholders at the oil firm passed a climate change resolution by a 62% majority.

The French market regulator has reportedly been asked by three shareholder activist groups to investigate Renault-Nissan chief Carlos Ghosn’s political conflicts of interest and possible governance breaches. Reuters reported that Proxinvest, Change to Win and RAIR had signed a 24-page letter to the AMF claiming that Renault neglected to inform shareholders adequately about the transfer of decision making power.

Japanese automotive giant Toyota has reportedly sold all its shares in Californian electric carmaker Tesla Motors Inc. – reported to be 1.43% as of July 2016, Bloomberg reports. The move marks the end of a relationship which began in 2010 with Toyota buying Tesla’s eco-driven operation for $50m, and the beginning of Toyota pursuing its own electric car programme.