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RI ESG Briefing, March 26: Deutsche Bank closes energy efficiency bond

The round-up of environmental, social and governance news

Environmental

Deutsche Bank has closed what is claimed to be the first-ever securitization of loans for residential energy efficiency with a $104m ‘PACE’ [Property-assessed clean energy] bond in California. The bond helps fund upgrading home insulation and installation of solar panels. The 11-year, double-AA rated bond was priced at a fixed coupon of 4.75% and was “extraordinarily well received” by investors which included large US insurance companies and asset managers. Link

Brookfield Renewable Energy Partners, the listed renewable energy vehicle, has agreed to buy the wind portfolio of Irish utility Bord Gais Energy for up to around €700m. Brookfield Renewable will fund the transaction with its institutional partners and maintain a 40% stake in the portfolio, which comprises 321 MW of operating wind capacity across 17 wind projects in eight counties in Ireland and Northern Ireland – around 15% of the installed wind capacity in Ireland. There is an additional 125MW currently in construction and an approximate 300MW in the pipeline. Announcement

A group of European development finance institutions are financing largest wind park in sub-Saharan Africa to the tune of €623m. The 300MW project, at Lake Turkana in the northwest of Kenya, will be backed by Germany’s DEG, the African Development Bank, the European Investment Bank, the European development finance institutions Proparco (France) and FMO (Netherlands) and other African development finance institutions and commercial banks, including the Standard Bank of South Africa.

Social

Danish pension schemes comprehensively screen out investments in companies that produce weapons that are banned under international conventions (landmines and cluster munitions), according to a report published by the country’s Council for Social Responsibility. The report (in Danish) lists Danish schemes and tabulates whether they have a screening policy on banned weapons, which all do. The report also looks at the implementation of regulation on controversial weapons in other countries.

Ninety-two worldwide companies, among them sustainable investor Trillium Asset Management, have been recognized for creating the most positive overall social and environmental impact by the not-for-profit B Lab, which assesses certified B Corporations. B Corps are companies which marry economic with positive social/environmental impact. Link. Governance

Canada’s Shareholder Association for Research and Education (SHARE) has released its 2013 Key Proxy Vote Survey, showing that Canadian shareholders are increasingly critical of the excessive nature of executive pay, including what it terms the “historic” 85% vote against Barrick Gold’s executive pay package last year and strong shareholder opposition at Canadian Natural Resources Ltd. and Canadian Pacific Railway. “More and more shareholders are voting against executive compensation packages,” said Catherine Smith, author of the 2013 survey report and SHARE’s Manager of Proxy Voting Services. The report analyzes the voting records of 40 firms with combined Canadian equity holdings of more than C$70bn.

NorthStar Asset Management, the US wealth manager with a focus on socially responsible investing, is leading a campaign to question the motives and effect of a series of company lawsuits, against shareholder activist John Chevedden, on both shareholder value and corporate governance. It follows four companies (Express Scripts Holding Company, Omnicom, Chipotle, and EMC) filing suits in U.S. District Courts to prevent Chevedden from exercising his right to participate in decisions about corporate governance, NorthStar said.

ShareAction, the UK campaign group, has launched a new campaign for savers, enabling them to demand firm action this year by their pension funds on the issue of pay, from the obscenely high executive packages for bankers to the low wages leaving thousands of British workers living below the poverty line. Link

Connecticut State Treasurer Denise Nappier has filed a shareholder resolution with Alliant Techsystems calling on the manufacturing company to report on actions it has taken with respect to the Sandy Hook Principles, a set of measures aimed at curbing gun violence. The Connecticut Retirement Plans and Trust Funds joined with New York State Common Retirement Fund in filing the resolution.

UK-based asset manager F&C Investments’ Annual Responsible Investment Report has shown that social issues relating to labour standards and human rights are becoming increasingly important to institutional investors, although, executive remuneration remains the most contentious issue dividing investors and company management. F&C, whose £708m acquisition by Canada’s Bank of Montreal, has received shareholder approval, applies a responsible investment approach both to its own portfolio, and on behalf of external clients’ assets, totalling assets of £83.4bn.

The UK government has published the third annual progress report into Women on Boards – three years on from a 2011 review by former minister Lord Davies. The latest figures show that women now account for 20.7% of board positions in the FTSE100 – up from 12.5% in 2011 and 17.3% in April 2013. Lord Davies originally set a target in 2011 of achieving 25% in 2015.