RI ESG Briefing, March 9: 75 institutional investors back class action-related ‘Amicus curiae’

The round-up of the latest ESG developments


The University of Bristol, the UK academic institution, has announced new fossil fuel divestment and carbon reduction plans, including ending investment in companies that derive more than 5% of their turnover from the extraction of fossil fuels by January 2018.

KGAL Group, a Germany-based asset manager with €21.5bn under management, has reported a saving of 32% (€530,000) in commercial property energy costs from its managed real estate as a result of its latest ESG initiatives. KGAL has announced that the benefit of the savings will be passed exclusively over to the tenants.

TH Real Estate, an operating division of TIAA Global Asset Management, with $97bn in assets under management, has committed to reducing the energy intensity of its $68bn global equity portfolio by 30% by 2030 (based on a 2015 baseline). It is estimated that real estate is responsible for roughly 40% of global carbon emissions.

The UK Parliament’s Public Accounts Committee is accepting written submissions for its Carbon Capture and Storage inquiry until March 14 ahead of a session on March 22. The inquiry comes on the back of the National Audit Office’s January report, which found that the Department for Business, Energy & Industrial Strategy has not achieved value for money for the £168m spend on the two competitions issued for government financial support, the first one cancelled in 2011. The lack of commercial-scale examples of CCS in the UK has made this technology more expensive as investors in the first projects require a higher return in line with the greater risk, the NAO said. However, the report stated, many stakeholders believe the government needs to carry more risk for CCS to kick off.


Australian super funds HESTA and Future Super and the philanthropic arm of Australia brewing firm Coopers are among the investors into a A$9m (€6.4m) social impact bond tackling homelessness, reports the Australian Financial Review. The social impact bond has a term of 7.75 years and has a fixed 2% coupon rate for the first 4.75 years, subsequent returns depend on meeting measured outcomes of reducing homelessness, and could reach 8.5% per annum.

Rapper Jay Z’s entertainment firm Roc Nation will reportedly venture into social impact investing later this year. It comes as Roc Nation announces the launch of venture capital firm Arrive to which New York-based firm Primary Venture Partners will be serving as advisor and GlassBridge Asset Management will be providing institutional and operational support, according to Business Insider UK.h6. Governance

Seventy-five institutional investors with more than $4trn in assets under management have got together in support of an investor rights case at the US Supreme Court, said law firm Bernstein Litowitz Berger & Grossmann. It had been calling on institutional investors to support an ‘amicus curiae’ (“friend of the court”) brief in the case of CalPERS v. ANZ Securities. It advocates why it is critically important for the American Pipe class action tolling rule to remain fully intact and be applied broadly to both the statutes of “limitations” and “repose” governing investors’ claims for recovery under the U.S. securities laws.

The Dutch Association of Investors for Sustainable Development (VBDO) has released a report and survey on Dutch institutional investors and tobacco. It finds 53% do not have a policy on tobacco. However, there are large differences between types of institutional investors. For example, in the insurance sector, only 9% of the respondents have not created a policy, while 73% of responding pension funds do not have a policy on tobacco. The report makes recommendations on how to formulate a policy concerning tobacco.

Wells Fargo, the scandal-hit US bank, is reportedly facing pressure from institutional shareholders to make further boardroom changes in the wake of the scam accounts scandal that cost former Chairman and CEO John Stumpf his position along with two other board members last year. New chairman Stephen Sanger reportedly met with representatives from the voting advisory firm ISS, as investors considered whether to protest the re-election of several board committee chairs.

EthiFinance, a French corporate social responsibility (CSR) rating agency, and Spread Research, a French credit ratings agency, are merging to form what’s claimed to be Europe’s first financial and non-financial rating agency for large-cap and mid-cap companies. EthiFinance’s CEO Emmanuel de La Ville called it “good news for ESG and Finance”. Financial terms of the deal weren’t disclosed. Spread, founded in 2004 by current CEO Julien Rérolle will acquire a minority stake (25%) in the new entity but will have an option to buy a majority shareholding of up to 100% in three years. The new group, with 25 employees in three locations (Paris, Lyon and London), will have more than €100bn in assets under advice.

Japan Bank for International Cooperation (JBIC) has been criticised by a group of NGOs including BankTrack, Friends of the Earth Japan and 350.org Japan for approving a $1.7bn loan agreement to finance the Tanjung Jati B 2 (TJB2) coal expansion power project in Indonesia. The project, which French banks Société Générale and Crédit Agricole withdrew from in December, is also backed by the ‘big three’ Japanese commercial banks – Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation.