RI ESG Briefing, May 11: United Methodists, Carbon Trust, American Investment Council, Sodali

The round-up of the latest ESG developments


Forty-nine scholars, both United Methodist and teaching at United Methodist-affiliated institutions, have released an open letter to General Conference delegates, calling them to support legislation to add fossil fuels to the US church’s socially responsible investment screens. Delegates at its General Conference – which takes place in Oregon until May 20 – will consider legislation adding coal, petroleum and natural gas to the socially responsible investment screens in the Book of Discipline and Book of Resolutions.

The Carbon Trust, the UK-based low carbon body, has been approved as a verifier under the Climate Bonds Standard, an assurance framework for bonds claiming to address climate change mitigation and adaptation developed independently by the Climate Bonds Initiative. The Climate Bonds Standard is backed by the Climate Bonds Standards Board, consisting of investor entities which collectively represent $34 trillion of assets under management.

A shareholder resolution filed at US power utility Entergy by corporate responsibility groups As You Sow and Arjuna Capital received strong support from 37% of Entergy’s shareholders representing approximately $3.2 billion in investor assets. The resolution highlights the need for Entergy to modernize its business model and incorporate distributed, low carbon technologies such as energy storage, rooftop solar, energy efficiency, and demand response.


Private Equity Growth Capital Council (PEGCC), the US private investment industry body, has changed its name to the American Investment Council and expanded its mission to promote “responsible long-term investment” to advance access to capital, job creation, retirement security, innovation, and economic growth. “It is more than a new name, it is a renewed commitment to be the voice for private equity in the United States,” said AIC President and CEO Mike Sommers. Announcement

Data from financial services firm State Street has shown that more than three quarters (76%) of pensions professionals want to hire fund managers with a good understanding of ESG issues. Of the 400 professionals surveyed, 26% expect a high level of interest in ESG investing from their clients and 57% anticipate ‘moderate’ interest. US and UK respondents, however, did not quite agree, with only 12% and 13% respectively expecting ‘high interest, compared with 52% of Swiss and 50% of Nordic pension professionals.h6. Governance

Sodali has acquired peer company Morrow & Co to form Morrow Sodali Global – which they say will be “the largest independent corporate governance, proxy solicitation, investor relations, capital markets and shareholder services firm in the world”. Sodali has offered such services within Europe, Latin America and other emerging markets while Morrow has served many of the largest listed US companies for more than 40 years. They will serve more than 600 corporate clients in 30 countries, advising on issues related to corporate governance, AGMs, shareholder activism, strategic communications, initial public offerings and so on. John Wilcox will serve as Chairman of the merged firm. He was previously Senior Vice President and Head of Corporate Governance at TIAACREF and was previously Chairman of Georgeson.

Virtually all of the 30 companies that trade on Germany’s blue-chip Dax equity index and the other 50 that trade on the mid-cap MDax index continue to uphold the recommendations of Germany’s Corporate Governance Code (DCGK), a new study shows. The study, released by the Corporate Governance Centre (HHL) at the University of Leipzig, showed 97.5% compliance among Dax companies and 95.2% compliance among those on the MDax. The results are unchanged from those obtained by HHL one year ago. The three authors of the study are Professors Steffen Rapp, Michael Wolff and Christian Strenger, who helped draft the DCGK.

German Finance Minister Wolfgang Schäuble has blasted Volkswagen’s top managers for wanting to pay themselves a bonus for 2015 despite the diesel emissions scandal that erupted last September. “I have absolutely no clue why a manager of a Dax-30 company would defend his right to a bonus after subjecting the company to an existential crisis,” Schäuble told the Frankfurter Allgemeine newspaper. Asked about the bonus at a news conference, VW Chief Executive Matthias Müller said he regretted that it was being debated in public. VW’s board has cut the bonus to Müller and other senior managers to an average of €3.2m.

US proxy firm ISS is backing a shareholder proposal filed ahead of Deutsche Bank’s annual general meeting (AGM) on May 19 that would have Deutsche conduct an audit of its governance following the scandals that have rocked the German bank. Oddly, however, ISS’ recommendation comes just three weeks after Deutsche, at the behest of German shareholder association DSW, already agreed to an audit of its governance. ISS also is recommending that Deutsche’s shareholders back both its management and supervisory boards.