RI ESG Briefing, May 1: New York City funds to vote against Wal-Mart directors

The round-up of environmental, social and governance news

Environmental

Renewable Energy Holdings, the AIM-listed wind power investor and operator, has announced it plans to dispose of all its assets in an “orderly sell down” and return the proceeds to shareholders. It would also seek a strategic investor to take over its 26% stake in wave power firm Carnegie Wave Energy.

Low Carbon Accelerator, the listed closed-ended green investment firm, has appointed brokers Cogent Partners to help its previously announced plan to sell off its portfolio and return cash to investors. LCA, which listed in 2006 raising £44.5m, added it has given notice to terminate its agreement with manager Low Carbon Investors Ltd. Major shareholders include Royal Bank of Scotland with a 45.1% stake, Merrill Lynch (5.5%) and the Derbyshire and South Yorkshire Pension Fund (4.5% and 4.3%).

Luxury brands firm PPR, the owner of the Gucci and Yves Saint Laurent names, has bought a 5% stake in carbon offsetting company Wildlife Works and announced a set of five-year environmental and social targets. It builds on the innovative environmental profit & loss account at portfolio company Puma, the sportswear brand. PPR site

Social

United Nations Secretary General Ban Ki-moon has called for the forthcoming Rio+20 summit to find a replacement measure for gross domestic product (GDP). “We need to move beyond GDP as our main measure of progress, and fashion a sustainable development index that puts people first,” Ban was quoted as saying by NGO Responding to Climate Change (RTCC).

Environmental, social and governance (ESG) researcher EIRIS has found that UK and continental European companies are outstripping their US and Asian counterparts on sustainability. “Big differences in corporate sustainability performance exist at the global and regional level,” said report author Mark Robertson. He said it is vital that investors use their influence to drive improvements in sustainability performance. Link

A new report has called for investors and trade union pension trustees to help push to improve corporate health and safety practices. Investing in Decent Work: Leveraging workers’ capital for healthy and safe workplaces was launched to mark the International Labor Organisation’s World Day for Safety and Health at Work by the Committee on Workers’ Capital, a labour movement group.h6. Governance

The five New York City Pension Funds will vote against five Wal-Mart directors at the company’s annual meeting on June 1, according to City Comptroller John Liu following the Mexican bribery scandal that has hit the giant retailer. Liu said: “Time and again our pension funds have approached Wal-Mart’s board with serious concerns about its practices in the US and abroad and received only empty reassurances. This board has failed its shareholders.”

The phone-hacking scandal that has embroiled media giant News Corp.’s News International has shows “huge failings of corporate governance at the company and its parent” according to a damning report by the UK Parliament’s Culture, Media and Sport Committee. The report concludes that News Corp. Chairman and CEO Rupert Murdoch is “not a fit person to exercise the stewardship of a major international company”. Link

Shareholders at Graco, the US lubricants firm, have voted by 83% for the company to adopt a majority vote standard for board candidates in uncontested elections. Anne Simpson, Senior Portfolio Manager who heads the corporate governance program at CalPERS, which supported the proposal, said: “Majority voting is a basic good governance practice and a hallmark of accountability.”

VBDO, the Dutch Association of Investors for Sustainable Development, together with a small group of shareholders, called on Dutch retailer Ahold at its annual general meeting to hold talks with US trades union UFCW over allegations that the company dissuades employees of US subsidiaries from becoming union members. Ahold disputes the allegations.
Separately, the VBDO also challenged brewing giant Heineken at its AGM over the issue of so-called ‘Cambodian beer girls’ – who keep clients company in bars in the country. They get a percentage of the proceeds from each bottle of beer their customer orders. Heineken set up a code of conduct for the use of beer promoters in 2006, which states inter alia that the girls at work are not allowed to drink with customers. While praising the approach taken by Heineken, VBDO called for the women to be paid a fair salary. Heineken said it would consult with VBDO on the issue.

Campaign group Fair Pensions has intensified its campaign on executive pay with the launch of an online tool that allows private investors to write to their pension funds or ISA (individual savings accounts) provider asking them to vote against high pay at AGMs. Link

Taking abstentions into account, 31.5% of shareholders withheld their support for the Barclays remuneration report at the bank’s annual general meeting last week.