RI ESG Briefing, March 31: Eurosif, Council of Institutional Investors, Trillium, CalSTRS

The round-up of the latest ESG developments

Environmental

Californian pension fund CalSTRS, the Interfaith Center on Corporate Responsibility, the Investor Network on Climate Change, NEI Investments and Trillium Asset Management are seeking support for an Investor Statement in support of a joint US and Canadian announcement on limiting methane emissions from the oil and gas industry by 40-45% over the next decade. The deadline for joining the statement is April 18. Organisations can sign on through this link and contact Jamie Bonham at NEI Investments with questions.

German insurance giant Allianz has acquired three wind parks in Finland with a combined capacity of 107.7MW from Impax, the UK renewable investment firm. Terms were not disclosed. In a statement, Allianz Capital Partners (ACP), the insurer’s alternative investment arm, said two of the parks, Joukhaisselkä and Kuolavaara-Keulakkopää, were located in Lapland, while the third, Saarenkylä, was in the region of Ostrobothnia. It brings ACP’s renewables portfolio to 63 wind parks and seven photovoltaic installations – worth more than €3bn.

The Climate Bonds Initiative, the green bonds industry group, has released the Geothermal Criteria allowing issuers to certify green bonds linked to geothermal assets. To qualify under the standard assets must have an emission threshold of less than 100g of CO2 per kilowatt hour. The first certification to come to market, backed by the Asian Development Bank (ADB), was the Philippines power utility, AP Renewables Inc (APRI).

The Securities and Exchange Commission is examining disclosures by US yieldco SunEdison to determine whether the firm overstated its liquidity position last year as its stock price collapsed, the Wall Street Journal reported. Citing people familiar with the matter, the paper said the SEC wants to find out whether SunEdison misled investors when it said in late 2015 that it had as much as $1.4bn (€1.2bn) in cash.

Social

The Global Impact Investing Network (GIIN) has launched IRIS 4.0, an upgraded version of the IRIS catalog of social, environmental and financial performance metrics used by impact investors to measure and manage the performance of their investments. GIIN Chief Executive Officer Amit Bouri said: “IRIS 4.0 brings us one step closer to a market in which investors prioritize impact alongside financial performance — measuring their investments with IRIS metrics, setting targets, and managing their portfolio to maximize results.” Link

Trillium Asset Management, the US SRI firm, has withdrawn a shareholder proposal with Nordstrom, after the upscale US fashion retailer agreed to make significant changes to its supply chain and committed to enhance transparency in its reporting.h6. Governance

Eurosif has published its response to the European Commission’s public consultation on long-term and sustainable investment that seeks to gather information on how ESG information is factored into investment decisions. In its response, the European Sustainable Investment Forum stresses the importance of integrating ESG criteria into investment decisions; the need for investors to rely on material ESG data based on reliable and harmonized reporting guidelines and the need for more transparency from financial players. Link

The Council of Institutional Investors (CII), the Washington-based institutional investor group, has adopted a new policy toward companies that conduct initial public offerings (IPOs). According to the CII, its members will prefer firms that, prior to an IPO, meet the following conditions: ‘one share, one vote’ structure, board independence and annual elections for directors. “When a company goes to the capital markets to raise money from the public, investors are entitled to certain protections and basic rights, including a vote that’s proportional to the size of their investment,” said Ken Bertsch, CII’s new executive director.

The Securities and Exchange Commission has reminded listed US companies not to be vague in the description of proposals from shareholders and management that are voted on at annual general meetings (AGMs). In new guidance, the regulator says proxy cards must “clearly identify and describe” action on which shareholders will be asked to vote.” It follows complaints from investors. According to the Wall Street Journal, two examples of such vagueness have come from New York Community Bancorp Inc. and FirstMerit Bank.

The Dubai Financial Market (DFM) stock exchange and the Hawkamah Institute for Corporate Governance have signed a partnership agreement to promote best practices of corporate governance in the United Arab Emirates. Through a series of co-organized activities such as workshops, the collaboration will reinforce the importance of good governance in enhancing efficiency in Dubai’s listed companies.

The Bursa Malaysia exchange has amended its listing requirements in order to raise standards of disclosure and corporate governance practices. The Kuala Lumpur-based exchange said the changes were ‘necessary to meet the growing needs of increasingly sophisticated investors’.

Schroders, the venerable UK-based asset manager, has reportedly ended its 57-year relationship with auditor PwC. The Financial Times said it follows concerns raised by large investors about the ability of audit firms to deliver independent advice and highlight mounting problems in the banking sector when they have worked for the same company for decades. It was also prompted by new EU rules that will force listed companies to change auditors every 20 years.