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RI ESG Briefing, March 13: Deforestation, Hermes-ACSI, NY Common Fund, NN Investment Partners, Impact Hub Madrid

The round-up of the key ESG developments

Environmental

Investors with $6.3trn in assets have called on companies to cut climate and deforestation-related risks in their soybean supply chains. A statement signed by the likes of Hermes, Legal & General and Robeco, said that increased demand for soybean products is destroying important biomes in South America and driving up emissions – exposing companies that source these products from the region to various business risks.

Dutch car-leasing group LeasePlan has issued its first green bond, a €500m five-year fixed rate note, which will be used to finance the purchase of Battery Electric Vehicles (BEVs). The bond attracted €3.5bn of demand with the participation of around 260 investors and 64% of the book allocated to Responsible Investment-orientated investors.

The Journal of Environmental Investment is calling for papers in all topics related to climate/green bonds, with taxonomies, benchmarks and the role of regulators listed among topics of particular interest. The deadline for submissions is April 30.

Social

The Singapore-based Impact Investment Exchange (IIX) has announced the Australian Government’s Department of Foreign Affairs and Trade as one of its partners for its $100m Women’s Livelihood Bond Program. DBS Bank, Shearman & Sterling, Latham & Watkins, and Cyril Amarchand Mangaldas are the other partners for the series, which is on track to launch in the second quarter of this year. Proceeds will go to enterprises supporting underserved women in Asia.

An NN Investment Partners study has found that there are “a surprisingly large number of stocks with a positive impact” – almost 3,000 out of a chosen universe of 15,000. See the full study here.

Impact Hub Madrid has produced an 84-page report intended to be an impact investment framework for the city of Madrid. The report recommends that the city becomes an impact investor in its own right, including setting up a fund managed by a city-owned company. In December 2018, the local government announced plans to inject €30m into social impact investment funds through a public tender in January 2019.h6. Governance

Hermes Investment Management’s stewardship and engagement team arm Hermes EOS, will work with the Australian Council of Superannuation Investors (ACSI) to provide reciprocal engagement services to their clients and members.

Thomas DiNapoli, New York State Comptroller and trustee of the New York State Common Retirement Fund, has filed shareholder proposals at four portfolio companies seeking increased board diversity. The companies – Gaming and Leisure Properties, New Residential Investment Corp., Sinclair Broadcast Group and Trip Advisor – are among hundreds with no women directors that DiNapoli has contacted in recent months.

Guidance on the integration of climate change-related risks when preparing financial statement has been issued by the Australian Accounting Standards Board (AASB) and the Auditing & Assurance Standards Board (AuASB). The guidance, although voluntary, expects companies to consider as part of a materiality judgement “whether investors could reasonably expect that climate-related risks could affect financial statements”.

A group of investors is reportedly suing Tesla over CEO Elon Musk’s tweets, alleging his “repeated misstatements” continue to harm the company and its shareholders. As well as monetary damages, the investors – which include the $2.1bn Ohio Laborers’ District Council and Contractors Pension Fund in Westerville, Ohio – are looking to block Musk’s “unchecked use of Twitter”.

An International Finance Corporation (IFC) study has found there’s a “compelling case” that women in leadership boosts overall company performance. The study, which reviewed the existing body of research, can be accessed here.

The US city of Boston has plans to invest $150m “in the short-term fixed income securities of companies that maintain strong corporate ESG practices”. It comes as the Massachusetts based city faces pressure from civil society to divest fossil fuels and private prisons. Boston City Council – which oversees assets in the region of $8bn – has also revealed plans to work with Ceres, the US sustainability advocacy group.