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RI ESG Briefing, June 27: AP3 anchors Generation IM’s new sustainable bond fund

The round-up of environmental, social and governance news

Environmental

The 80-member Institutional Investors Group on Climate Change (IIGCC), which represents €7.5trn of asset under management, has published its response to the European Commission’s 2030 Climate and Energy Green Paper. They signalled their support for the European Union’s proposed target of a 40% reduction in greenhouse gas emissions by 2030, but want policymakers to make the vision of a low-carbon, single energy market investable by urgently tabling proposals for detailed policy.

Sumitomo Mitsui Banking Corporation and Bank of Tokyo Mitsubishi UFJ Canada have closed a C$52.8m (€38.8bn) wind farm loan refinancing with Toronto-listed Innergex Renewable Energy for the Carleton project on the Gaspé Peninsula in Quebec. The Carleton development, comprising 73 wind turbines with a total installed capacity of 109.5MW, was commissioned in 2008 with all electricity produced sold to the Hydro-Quebec utility.

The board of US development finance body the Overseas Private Investment Corporation (OPIC) has approved financing to support the construction of two solar power plants in the Atacama Desert developed by Chile’s Amanecer and San Andres and US project sponsor, SunEdison. OPIC is also backing a 50MW wind farm in northeastern Uruguay by Estrellada, the Uruguayan subsidiary Juwi AG and Nordex USA.

Social

A new ‘vaccine bond’ has been issued by the International Finance Facility for Immunisation Company (IFFIm). The $700m, three-year issue, which will help fund immunisation programmes by the GAVI Alliance, was lead managed by Daiwa Capital Markets and Deutsche Bank. The bonds were “oversubscribed” and successfully placed with investors around the world, despite volatile market conditions. “This transaction provides an opportunity for investors to align their principles and investments through a security with a clear and measurable social benefit,” said Stephen Liberatore, Managing Director at giant US investor TIAACREF.h6. Governance

Tredje AP-fonden (AP3), the SEK233bn (€26.6bn) third national Swedish fund, has invested $50m in Generation Investment Management’s new sustainably-slanted Global Credit Fund as an anchor investor. “This is an investment in companies with focus on sustainability challenges and opportunities, and that are typically unable to access the wider capital markets,” said AP3 Chief Executive Kerstin Hessius.

The International Corporate Governance Network (ICGN), the network representing more than $18trn in assets under management, has announced that Geof Stapledon, Vice President of Governance for mining giant BHP Billiton, has joined its board. He succeeds California State Teachers’ Retirement System investment chief Chris Ailman. Michelle Edkins of BlackRock was re-confirmed as Board Chairman. The ICGN said Stapledon joins the board at a time when the ICGN is increasing its efforts to “enhance dialogue between companies and investors”.

Following a campaign led by €140bn Dutch asset manager PGGM, the chairman of the supervisory board and the executive chairman at German real estate fund GSW Immobilien have quit, it has been reported by IPE.com. Earlier this month, just under 70% of shareholders backed PGGM’s call for supervisory board head Eckart John von Freyend to step down. Von Freyend leaves on July 31 while new CEO Bernd Kottmann exits with immediate effect.

Fifty-five percent of US companies are disclosing engagement with investors in the current proxy-voting season – up from 38% in 2012 – according to consultants at Ernst & Young. E&Y said more companies are discussing governance topics with shareholders and making changes in response to shareholder feedback, and investor efforts to engage companies using shareholder proposals and other methods are increasing. And larger shareholders were also making it clear that their voting decisions “are the result of independent evaluations”. Link

Global business network and sustainability consultancy BSR has opened a new office in Copenhagen, Denmark, led by BSR Vice President, Europe, Middle East, and Africa (EMEA), Peder Michael Pruzan-Jorgensen.