RI ESG Briefing, May 10: ABP, ATP, S&P carbon scorecard, Korea’s National Pension Service

Environmental

Dutch civil service pension giant ABP says it is on course to reach its concrete objectives for sustainable investing by 2020. According to its new Sustainable and Responsible Investing Report, the influential asset owner invested 25% more in renewable energy, while the CO2 emissions in its equity portfolio were reduced by some 7m tonnes. Link (Dutch)

The International Standards Organisation (ISO) is developing a climate action standard called ISO 14080. “Future ISO 14080 will help government and industry put together credible, transparent and consistent climate action,” the ISO says. The new standard, at the Draft International Standard (DIS) stage, will provide guidance on how to create effective mitigation and adaptation activities while giving stakeholders enhanced access to financial and other resources needed to combat climate change. It will take into account prevailing climate change policies as well as the 17 United Nations Sustainable Development Goals (SDGs).

50 UK MPs have reportedly backed a campaign calling for Parliament’s £612m pension fund to divest from fossil fuels. Campaigners argue that the millions the fund invests in fossil fuels is incompatible with the UK Government’s commitments under the Paris Agreement to limit global temperature to below 2 degrees. In March this year, pressure from The Divest Parliament campaign, which receives cross party support, prompted the fund to publish investment data for the top 20% of its holdings for the first time.

S&P Dow Jones Indices and Trucost, its UK-based environmental data group, have published The S&P Dow Jones Indices Carbon Scorecard, which analyses global major S&P DJI equity benchmarks’ carbon efficiency and energy mix alignment against 2°C climate scenarios. The scorecard suggests that the S&P Latin America 40, whilst one of the most carbon intensive indices, is potentially best positioned to meet a global 2°C energy mix scenario for 2030 and 2050.

Social

Trillium Asset Management has warned of the possible economic consequences of the Trump Administration’s recent executive order on religious liberty. The SRI firm says it suggests that the Administration may be considering allowing individuals and organizations greater freedom to discriminate against the LGBT community, resulting in economic consequences. CEO Matthew Patsky said: “As investors, we know that discrimination is bad for business. It casts a pall over our communities that inhibits innovation, slows or even halts growth, and makes it extremely difficult for companies to attract and keep top talent.”

Shareholders at National Express are planning to vote against the UK bus company’s remuneration report at its May 10 annual meeting in the wake of a fatal accident involving one of its buses in the US, the FT reports. Investors oppose a £1m bonus to be paid to CEO Dean Finch based upon a clause that states an improvement in safety processes is a precondition of any such award. Last November one of National Express’ US buses, run by its Durham School Services subsidiary, was involved in a crash in which six children died.

Spanish insurance group Mapfre has become a signatory to the UN-supported Principles of Responsible Investment (PRI). It said that, in line with its long-standing support for the UN principles of sustainable insurance, the group has decided to “gradually align its investment policies”; its asset management business, MAPFRE AM launched a fund that invests exclusively in companies with good corporate governance.h6. Governance

ATP, Denmark’s largest pension fund, and Folksam, the Swedish retirement scheme, are among seven large investors (managing assets in excess of €300bn) to pull their investments in Ryanair amid concerns over the ‘budget’ Irish airline’s high-profile labour disputes, the FT reports . Both UK based asset manager, Baillie Gifford, and institutional investor adviser, Hermes EOS have also reportedly expressed concerns about labour issues at Ryanair in recent months.

Ivox Glass Lewis, the Germany based shareholder advisory group, has urged German multinational chemical firm Linde’s investors to vote against signing off on the actions of its management amid concerns over the handling of the proposed merger with peer industrial gas supplier Praxair, Reuters reports. Linde’s management had hoped to have a plan for the merger in place before its annual shareholder meeting on May 10 but the deal has fallen behind schedule due to the ongoing dispute with its employees.

Korea’s $500bn National Pension Service (NPS) is reportedly preparing to introduce a Stewardship Code aimed at encouraging institutional investors to engage with companies. Korean Investors, citing an unnamed source, reported that NPS has begun the process of outsourcing a research for the introduction of Stewardship Code, a set of guidelines for institutional investors. It received applications for the five-month research contract by May 8, according to the welfare ministry.

Communications Japan (ICJ), a joint venture between US investor services firm Broadridge and the Tokyo Stock Exchange, has announced it has exceeded 800 participating share-issuing companies on its “electronic proxy voting platform”. The platform, which has seen 80% growth over the past three years, aims to help catalyse constructive dialogue between listed companies and institutional investors, promoting high standards of corporate governance.

Shareholders at Canada based energy firm TransAlta have successfully defeated the Board’s motion to endorse its approach to executive compensation via an advisory “say on pay” vote. The vote, which is non-binding, is a means for shareholders to communicate discontent with the Board on governance issues. The vote at TransAlta was the first Canadian vote this year where the majority of shareholders opposed the Board’s compensation plan.

Canada’s C$270bn (€186.7bn) Caisse de dépôt et placement du Québec has reportedly announced that it is withholding its support for the re-election of Bombardier Inc’s Executive Chairman, Pierre Beaudoin and will not back the company’s proposal on executive compensation. The Canada based aerospace and transportation manufacturer has recently faced criticism over its decision to grant big raises to some of its executives despite receiving financial backing from the governments of Canada and Quebec.

Hermes Equity Ownership Services, the engagement arm of the fund manager owned by the BT Pension Scheme, has urged VW shareholders not to clear the German carmaker’s management and supervisory boards from responsibility for actions taken in 2016, Reuters reports. Hermes EOS made the announcement in anticipation of VW’s annual shareholder meeting in Hanover.