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RI ESG Briefing, May 10: Generation IM backs energy efficient lighting

The round-up of environmental, social and governance news

Environmental

The UK Sustainable Investment and Finance Association (UKSIF) has welcomed an announcement in the UK Queen’s Speech (May 9) that the government will bring forward legislation to set up the Green Investment Bank but warned that unless it includes a strong commitment to enable it to borrow from the capital markets, its ability to boost low carbon growth could be muted.

Generation Investment Management has led a new $18.3m investment round at Colorado-based energy efficient LED lighting company TerraLUX. The fund-raising also had the participation from existing investors Emerald Technology Ventures and Access Venture Partners. Also participating were undisclosed private investors as well as company founder Anthony Catalano and other executives.

The Aldersgate Group, a collection of investors, companies, NGOs and other groups, have written to the UK government calling for mandatory carbon emissions reporting to “ensure greater accountability and transparency; create a level playing field, and help enable investors and consumers to make meaningful comparisons”. Investor signatories to the letter include Aviva Investors, Jupiter and Climate Change Capital. Link to letter

The preliminary number of companies and other organisations to be hit with Australia’s planned carbon tax has been put at 248 – a lot lower than the 500 originally expected, according to a report in the Sydney Morning Herald. The $23-per-tonne carbon tax comings into force from July 1.

Social

Companies not responding to a call by a coalition of US and UK SRI investors to train staff and suppliers on child and labor trafficking issues during the 2012 Olympic Games in London will be named in a future press release, the investors say. On March 5, 2012, a coalition of 37 investors representing $58 billion including Christian Brothers Investment Services, the Interfaith Center on Corporate Responsibility (ICCR) and The Ecumenical Council for Corporate Responsibility wrote to 37 companies, notably in travel and tourism. It said companies that acknowledged the coalition’s letter included: Accor, Best Western, British Airways, Choice Hotels, Carlson, Hilton, Hyatt, InterContinental Hotel Group, Starwood, Thomas Cook, and Whitbread, along with Olympic sponsors: Adidas, ArcelorMittal, BMW, Coca-Cola, John Lewis, Kraft Foods, McDonald’s, Next, Procter & Gamble, Rio Tinto, Sainsbury’s and Samsung.
Link

Sustainable Finance Geneva has launched three ‘Individual Principles for the Responsible Investor’, or IPRI. The scheme is aimed at individuals within finance rather than companies and seeks to complement international initiatives such as the UN PRI. The first principle is “I Know” (Inaction, like ignorance, carries a price. The second is “I apply” (Investing is making choices). The third is “I share” (Sharing stimulates learning). “We are convinced that professionals, as intermediaries, have a crucial role to play in the promotion of best practices,” said Association Vice President Jean Laville of Ethos. Home page*Reminder: May 24 is the deadline* for providing feedback on the outputs and assessment methodology of the United Nations Principles for Responsible Investment’s new Reporting Framework. Link

Membership of the Stewardship Action Council, which aims to raise the level of social, environmental, and economic performance, has grown to 73. The council is open to non-governmental organizations, states and local government, social investment companies, academic institutions and industry. Its first annual report is available here

Governance

Pendragon, the UK auto retailer, is the latest company to be hit by a major pay revolt over executive pay after 67% voted against the company’s remuneration report at its May 10 AGM. The company said it would scrap proposed changes to its executive pay deal.

The $153bn California State Teachers’ Retirement System (CalSTRS) has said the leadership of retail giant Wal-Mart is in question over the Mexico bribery scandal. CalSTRS’ Chief Executive told a conference call that the leadership question was “on the table” at the company it is suing over the crisis. “This could well be the Fortune 100 version of Watergate,” Ehnes was quoted saying.

The C$117.1bn (euro) Ontario Teachers’ Pension Plan has announced that it will vote against Sprint Nextel Corp. compensation practices at the telecoms firm’s annual meeting on May 15. It said it has articulated concerns about compensation directly to senior management and the board of Sprint Nextel frequently over the past year.

UKSIF has called on the UK MP’s (Members of Parliament) Pension Fund to sign up to the UK Stewardship Code following initiatives by the Government to boost shareholder engagement announced in the Queen’s Speech. The forthcoming enterprise and regulation bill looks set to give shareholders of UK quoted companies a binding vote on directors pay.

The £3.5 Lothian Pension Fund has reappointed Hermes Equity Ownership Services to provide it with voting, corporate engagement and public policy services on selected equity portfolios.

Shareholders at UK-based bookmakers William Hill voted 49.8% against the company’s remuneration report at the company’s annual meeting earlier this week. The vote was eventually passed on a show on hands at the meeting.

A new company has been set up to help financial institutions organisations choose US class actions law firms. Lead Plaintiffs Global Ltd. uses a historical database and a team of lawyers to report to clients. It is opening a New York office this month (May) and a Chicago office in June. Link

Proxy firm ISS (Institutional Shareholder Services), is increasingly being challenged over its voting recommendations on executive pay, according to a report in the Wall Street Journal. The Journal said that already this proxy season, 52 companies have contesting ISS’s recommendations – up from 27 a year ago.