RI ESG Briefing, March 20: Bank of America pressed on coal investments

Environmental

Bank of America is being urged to restrict its investments in the coal industry in a letter signed by 50 leading financial, environmental and legal experts coordinated by the Rainforest Action Network. A delegation of five signatories is set to deliver the letter to the bank today. Signatories include socially responsible fund firms with $3.74trn in assets under management such as Trillium Asset Management, Domini Social Investments, Clean Yield AM, Pax World and Zevin AM. Other notable signatories include 350.org co-founder Bill McKibben and Harvard linguist and campaigner Noam Chomsky.

The Roundtable on Sustainable Palm Oil (RSPO), the industry trade group, has responded to the Norwegian Government Pension Fund’s decision to sell its stakes in 23 palm oil companies. While it is an “affirmative action” to encourage the companies to shift to sustainable practices, the RSPO says some of the excluded firms include members who have begun the certification process. The RSPO says it “would be interested to understand the other considerations which were used” by the fund in its decisions.

Social

The UK’s cerebral palsy charity Scope won the ‘Sustainable Finance’ category at the Sustainable City Awards in London last night for its innovative £20m bond programme. There were also awards for Aviva, Investec, CA Cheuvreux and British Land. Scope was recognised at the ceremony at the Mansion House, the Lord Mayor of London’s residence in the heart of the City financial district. The category was awarded in association with UKSIF, the UK Sustainable Investment and Finance Association. The landmark programme, announced in 2011, is designed to complement Scope’s existing funding from donations and philanthropic loans. The first bonds were issued in June last year on the Euro MTF market in Luxembourg with investors including wealth managers, unit funds and private investors as well as charitable trusts and foundations. The response from investors was “unprecedented” Scope says.h6. Governance

US electrical workers’ pension plan, the Illinois-based NECA–IBEW Health & Welfare Fund, has reportedly won a victory in a financial crisis-related class action case against Goldman Sachs. The US Supreme Court refused to consider the investment bank’s appeal against an earlier decision dating back to September last year – which means that the fund will be able to sue on behalf of other investors.

An agreement at the European level on bankers’ bonuses is set to be reached tonight (March 20), according to Sharon Bowles, the Chair of the European Parliament’s powerful Economic and Monetary Affairs Committee. New rules on bonuses, incorporated in the updated Capital Requirements Directive (CRD), include: a salary/bonus ratio of 1:1 which can be raised to 1:2 with a shareholder vote of 65%. And up to 25% of the bonus can be paid in long-term instruments linked to the capital, and therefore stability, of the bank. “A cap on bankers’ bonuses is not a punishment for bankers but a realignment of the work / reward ratio,” Bowles added.

Drinks and food giant PepsiCo has agreed to disclose all of its direct lobbying and contributions made to trade associations, according to New York State Comptroller Thomas DiNapoli, who oversees state’s Common Retirement Fund. In response to the agreement – made alongside Walden Asset Management – DiNapoli has withdrawn his shareholder resolution on the issue, saying: “PepsiCo has taken an important step in giving shareholders a clear view of the way it uses corporate dollars in the political arena.” Tim Smith, Walden’s Director of ESG Shareowner Engagement was “pleased that the dialogue with PepsiCo management resulted in an agreement to provide information on the company’s lobbying to impact public policy, both directly and through third parties like trade associations”.

Listed alternative investments manager Man Group says it will cap future cash bonuses for its senior executives. They will be limited to 250% of salary for executive directors after discussions with shareholders. It is also not paying bonuses to its senior management for 2012. Some 80% of long-term deferred bonuses would be determined by financial metrics such as net client flows and investment performance. Man said in its new annual report: “The board has also recognised that the current remuneration structure had become overly complex with a resulting lack of transparency to shareholders.”