RI ESG Briefing, June 27: Investors feed into US board pay guide

The round-up of environmental, social and governance news


Climate Change Capital Private Equity (CPE), the €200m private equity fund backed by investors including Alpinvest, Robeco and the Universities Superannuation Scheme, has participated in a €12m funding round for German smart grid firm Power Plus Communications. Existing investor CPE was joined by British Gas and Siemens Financial Services.

Legal & General, the UK insurance and fund management firm, has disclosed a 6% shareholding in Phaunos Timber Fund Ltd., the London-listed forestry investor managed by Four Winds Capital Management. Filing

Mini-hydro electricity business Frendy Energy has listed on the Italian small-business exchange AIM Italia-Mercato Alternativo Del Capitale, part of the Borsa Italiana. Florence-based Frendy, set up in 2006, raised €2,730,000 giving it a market capitalization of €17.7m.


Only four of the nine German Pensionsfonds, the vehicles most comparable to Anglo-Saxon style pension funds, are considering investing along environmental, social and governance (ESG) criteria, according to findings in a survey by Handelsblatt Business Briefing Nachhaltige Investments. The four pension funds are those for the technology firms Bosch and Siemens as well as those of food group Nestlé and telecoms giant Deutsche Telekom. At the end of 2010, these funds held a combined €7.6bn in assets. Of the remaining five Pensionsfonds, which together held €14.2bn at the end of 2010, two said they did not consider ESG when investing. The two are that for energy firm RWE and that for postal firm Deutsche Post.

Handelsblatt Business Briefing Nachhaltige Investments.
The £17m Prudential Ethical Trust from the UK’s Prudential has closed, according to reports citing Prudential Unit Trusts CEO William Nott. The fund was launched in 1999 and Nott was quoted saying that the fund would not be of sufficient size following the withdrawal of a number of corporate investors.h6. Governance

Representatives from the institutional investment industry have had input into an initiative by the US National Association of Corporate Directors (NACD) to produce a guide that helps company boards develop pay plans to effectively compensate executives and articulate how they create long-term value for shareholders. Present at a meeting to discuss the plan recently were Amy Borrus, deputy director at the Council of Institutional Investors, Carol Bowie of Institutional Shareholder Services (ISS) and Anne Sheehan, director of corporate governance at CalSTRS, the California State Teachers’ Retirement System. Link

Law firm Robbins Geller Rudman & Dowd has filed an investor class action against Swiss bank UBS on behalf of an institutional investor in the US District Court for the Southern District of New York. The complaint alleges that UBS made false and misleading statements regarding its financial reporting relating to alleged rogue trader Kweku Adoboli, which resulted in $2.3bn in losses.

John Plender, the former chairman of proxy firm PIRC and Financial Times journalist, has called on the proxy advisory industry to develop its own standards. He writes: “It would not serve the public interest if heavy regulation saddled an industry with additional fixed costs when margins are being squeezed by a dominant player.” Link

State Street Global Advisors, the UN PRI signatory asset management giant, has had its investment management agreement with Robusta Asset Management terminated. Robusta is the Irish-listed fund vehicle for food firm Nestlé’s small to medium sized pension investments. Link

Australian Ethical Investment, the sustainable funds boutique, has claimed victory against a group of “dissident” shareholders which it termed an “unfortunate distraction”. It said shareholders voted to reject all resolutions put to a general meeting called by a small group of investors. Chairman Andre Morony said: “‘it is time for the company to heal and continue unhindered on its mission of promoting ethical investment.” Link