RI ESG Briefing, June 5: Germany’s Sparkassen Pensionskasse in ESG push

Environmental

Three large US mutual fund companies – DWS, AllianceBernstein and Oppenheimer, which collectively manage more than $930bn assets – last year supported the vast majority of shareholder resolutions filed with companies on climate change risks, according to an analysis by sustainability advocacy group Ceres. Until 2011, DWS had never supported any climate resolutions, while AllianceBernstein had cast only two votes in support of them over the previous 10 years, until voting for 21 of the 26 resolutions that went to a vote at its funds last year. But six fund families (BNY Mellon, Franklin Templeton, ING, Pioneer, Putnam and Vanguard) failed to support any climate-related resolution in 2012.

UKSIF, the UK Sustainable Investment and Finance Association, and the Aldersgate Group have stated that a 2030 decarbonisation target for the power sector is essential to stimulate new growth in the economy on the eve of a crucial vote in Parliament. They argue that the current lack of certainty is damaging critical investment in the UK’s energy infrastructure and are call today on Members of Parliament to vote in favour of a target in the Energy Bill that would commit the UK to a near-carbon free power sector by 2030.

Nordic banking groups DNB and Swedbank have agreed a combined SEK280m (€32m) worth of loan arrangements with Sweden-based Arise Windpower for 15 wind turbines across three windfarms. Construction has begun on all projects which in total are expected to produce around 87,000 GWh per year.

The NZ$22bn (€14.3bn) New Zealand Superannuation Fund has appointed London-based Leadenhall Capital Partners to a US$275m mandate focused on natural catastrophe reinsurance linked investments, including direct reinsurance linked assets and catastrophe bonds. This is the fund’s second investment in natural catastrophe reinsurance linked products after an initial investment in 2010. Catastrophe bonds and reinsurance-linked assets spread the risk and cost of major catastrophic events (such as major hurricanes, earthquakes and bushfires) that are unlikely to occur but are very expensive when they do.

Social

Norway’s NOK4.3trn Government Pension Fund is reportedly considering divesting mining companies that violate workers’ rights. The fund could also exit firms involved in cattle ranching over exploitative working conditions, according to a Reuters report citing Ethical Council head Ola Mestad.

Dresser-Rand Corp Group and Sprint Nextel Corporation have been recommended for inclusion in the Calvert Social Index. Events company Dresser-Rand has “improved disclosure of environmental and workplace safety policies, programs and performance data”. Telecoms group Sprint Nextel, meanwhile, has improved its customer service experience and “remains a market leader in environmental disclosure”.

US industrial group Caterpillar is facing a proposal filed by the New York State Common Retirement Fund, which calls on the company to “take additional steps to ensure that its products not be sold to the government of Sudan or entities controlled by it.” The company holds its AGM on June 12.h6. Governance

Sparkassen Pensionskasse (SPK), a €2.7bn multi-employer pension scheme launched by German savings banks, has become the 13th asset owner in that country to join the Principles for Responsible Investment (PRI). Citing the principles, SPK said that it would now invest along environmental, social and governance (ESG) criteria and encourage portfolio companies to report on their progress on this front. “Integrating ESG does not in any way conflict with our return targets, but is both a part of our risk management,” said Robert Bielefeld, head of investments at SPK, in a statement. Added Olaf Keese, SPK’s chief executive: “Our (PRI) membership is just another step toward the goal of investing in a way that secures the pensions of our insured for decades.”

Dexia Asset Management says it “abstained or rejected” 48% of resolutions on corporate directors’ remuneration in 2012. It said: “The reasons for our voting “Against” included serious concerns over remuneration practices, mainly because of the lack of disclosure on total potential awards and/or performance targets attached to long-term incentive plans (share options and restricted shares).” The figures are contained it Dexia’s new 2012 Engagement Report.

Pax World Management, the investment adviser to the sustainable Pax World Funds, has withdrawn its shareholder proposals filed at medical waste firm Stericycle and real estate investment trust Hospitality Properties Trust. Pax World says it has received “positive responses” from both companies on board diversity. The resolutions had requested that the companies take reasonable steps to ensure that women and minority candidates are in the pool from which board nominees are chosen. “We are pleased and want to commend Stericycle Hospitality Properties Trust for taking steps to formally affirm their commitment to board diversity,” said Heather Smith, Pax World’s lead research analyst on the sustainable investing team.

The Stock Exchange of Thailand (SET) teamed up with the Government Provident Fund (GPF), RobecoSAM, S&P Dow Jones, Mercer and MSCI to host a seminar on sustainable investment last month. The “Sustainability Investment: Time for Benchmarking” event aimed to support listed, securities and asset management companies to prepare for investment trends focused on sustainable business development, SET said.

The Principles for Responsible Investment’s ESG Investor series continued this week with a webinar featuring Norwegian aluminium and renewable energy company Norsk Hydro. Executives from Oslo-based Norsk Hydro were due to address PRI signatory investors on a one-hour webinar today (June 5). The webinar series is part of a joint project initiated by the UN Global Compact and the UN-supported PRI to improve company-investor communications on ESG issues.