Environmental
Denmark’s ATP pension fund made DKK4bn (€537m) profit on its investment into Dong Energy in less than three years, according to reports. In 2013, ATP bought DKK2.2bn new shares in the energy company when it was facing financial difficulties. Fellow pension fund PKA, and Goldman Sachs, also took part in the equity raise, which totalled DKK11 billion. Dong began trading on the Nasdaq Copenhagen today, following the year’s biggest European IPO which valued it at DKK98bn. Carsten Stendevad, ATP’s CEO, told Reuters that the deal showed “return on capital can go hand in hand with a green (energy) transition”.
The Public Investment Corporation (PIC), South Africa’s state-owned asset manager, says that its investments in renewable energy projects have help add around 2,016 megawatt-hours to the country’s grid over the past year. “It is up to the investment community to ensure that they invest in line with a long-term sustainable strategy. The focus should shift from short-term performance benchmarks to sustainable returns over the long term,” said CEO Daniel Matjila in an opinion piece on news portal IOL.
BP has agreed to reimburse investors to the tune of $175 million in its latest payout over the 2010 Deepwater Horizon disaster. A court case was slated to begin in July, led by investors who bought shares in BP after the explosion in the Gulf of Mexico, but before the full extent of the damage was known. The investors argued that BP had initially concealed the scale of the disaster, and its share price subsequently plunged as more information became public. The lawsuit could have led to payments of up to $2.5 billion, according to reports. BP will now pay $175 million to the investors during 2016 and 2017. Link
The Luxembourg Stock Exchange has become a Climate Bonds Partner, having listed its 100th green bond earlier this year. LuxSE issued the first ever green bond back in 2007, and its CEO Robert Scharfe said that he believes green finance will “become the foundation of future capital markets”. He added: “Green bonds will be a central feature of this new marketplace. But for this to happen we will need more standardized approaches.”
The Securities and Exchange Commission in the US says Ethiopia’s electric utility, Ethiopian Electric Power (EEP), has agreed to pay nearly $6.5m to settle charges that it violated securities laws by failing to register bonds it offered and sold to US residents of Ethiopian descent. The SEC said EEP conducted the unregistered bond offering to help finance the construction of a hydroelectric dam on the Abay River in Ethiopia. It added EEP held a series of public road shows in major cities and marketed the bonds on the website of the U.S. Embassy of Ethiopia as well as through radio and TV ads and raised around $5.8m without ever registering the bond offering with the SEC.
Social
The first standard for reporting food loss and waste has been launched, to support the growing number of companies committing to reducing their wastage. The Food Loss & Waste Accounting and Reporting Standard (FLW Standard) is a voluntary standard aimed at businesses, governments and other entities. It has been developed by the Consumer Goods Forum, the UN Environment Programme, the World Business Council for Sustainable Development and others.
French asset manager Ossiam has signed up to the Principles for Responsible Investment (PRI). A subsidiary of Natixis, Ossiam specialises in ‘smart-beta’ fund management. It said the principles were aligned to its belief that “including ESG factors in portfolio construction enhances our product offering for the benefit of investors”.h6. Governance
Proxy firm Institutional Shareholder Services (ISS) has launched a platform called ISS Analytics to aid portfolio managers and others in screening extra-financial governance and ESG factors to aid in portfolio company selection and monitoring. It says the new technology will help institutions support investment decision-making using extra-financial data and analytics on thousands of publicly traded corporations worldwide. “With the launch of ISS Analytics, the global investment community can now mine ISS’ rich governance and responsible investment content with ease and efficiency across either our broad coverage universe or at a portfolio level,” said Marija Kramer, Head of Product Development.
Woodside Petroleum, the Australian oil and gas firm that was subject to the country’s first climate change resolution back in 2011, and the New Zealand Superannuation Fund, have taken top honours for governance reporting in the 2016 Australasian Reporting Awards. “This year, private sector winner Woodside Petroleum has delivered an exemplary report, which not only explains clearly the processes followed by them for determining director independence but also provides excellent coverage of Woodside’s diversity policy,” said the Governance Institute of Australia. NZ Super heaeded the public sector category for a “commendable and well-rounded report”.
PGGM, McKinsey & Co, Kempen Capital Management and nine other organisations have teamed up to launch a “social newsroom” to promote long-term investment. The website, www.shiftto.org, promises to provide a platform for “a wide range of views from the (international) financial sector and beyond” to “bring insights, experience and research in the field of long-term investment together”. The editorial board comprises representatives from: Eumedion, Rotman School of Management, McKinsey, PGGM, Kempen and others.
Mutual fund giant Fidelity, has reportedly decided not to sign up to draft guidelines produced by Jamie Dimon’s corporate governance group. The JPMorgan CEO has been leading discussions on creating a code of best practice for US boards since February, with discussions involving top asset managers and some of the US’s biggest companies. The Financial Times said that joining Fidelity in rejecting the draft rules is Wellington Management, a Boston-based firm that manages $943bn.
The Global Reporting Initiative is seeking feedback on its revised sustainability standards, which have been overhauled to “enhance [their] credibility and uptake”. The GRI Sustainability Reporting Standards comprise 30 standards based on the existing G4 Guidelines. Each standard covers an ESG issue, such as corruption, emissions, biodiversity and child labour. The new draft, which is open for public consultation until 17 July, is structured so that individual standards can be reported on and updated independently for the first time. Link
The UK’s largest pensions and investment firm has branded Sports Direct’s governance “extremely concerning for investors”, following a Select Committee hearing on Working Practices at the former FTSE 100 company. Piers Hillier, chief investment officer at Royal London Asset Management – which manages some £88 billion ($128 billion) of assets – said the hearing highlighted a “long list of corporate governance failings”, which were “a contributing factor to its fall from the FTSE 100” in March. Royal London holds just over a million shares in the firm, worth £3.85 million.
A group of pension funds called on its members to reject WPP’s latest remuneration report on grounds of excessive pay. The UK’s Local Authority Pension Fund Forum (LAPFF) had urged its 70 member funds to vote against the report at the advertising giant’s AGM citing “excessive payments offered to Sir Martin Sorrell, WPP’s CEO”. In the event, 33.5% of investors failed to back the pay deal in a non-binding vote.
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