RI ESG Briefing, May 19: Principles for Responsible Investment gains first Iranian signatory

Environmental

A new online platform has been launched to collate, for the first time, the myriad actions on climate change being undertaken by the global investor community. The Investor Platform for Climate Actions covers measurement, engagement and reallocation (investment in low carbon assets and shifting capital from emissions intensive activities). It comes ahead of the crunch COP21 meeting in Paris later this year and ahead of a series of high-level climate events in the city this week. The platform is a joint project of the Institutional Investors Group on Climate Change in Europe, Ceres’ Investor Network on Climate Risk in North America, Australasia’s Investor Group on Climate Change, the Asia Investor Group on Climate Change, the Principles for Responsible Investment, CDP and the UN Environment Programme Finance Initiative. The regional climate investor groups will be hosting a webinar with Responsible Investor on June 10, using the recent Climate Change Investment Solutions: A Guide for Asset Owners as the basis for discussion. Please register here.

Oil companies Hess Corp., Exxon Mobil, Royal Dutch Shell, Statoil and Petrobras are to be removed from the NASDAQ OMX CRD Global Sustainability Index. Mining firms Rio Tinto and Vale will also be axed, following a regular re-ranking. The index benchmarks US-traded companies taking a leadership role in sustainability performance reporting. Added to the index are names such as Adobe Systems, Campbell Soup Co., FedEx, Tesla Motors and Verizon Communications. Announcement

Regency Centers Corporation, the Florida-based, NYSE-listed shopping centre operator, has released its ‘Use of Proceeds and Management Report’ detailing the use of proceeds from its green bond issued on May 16 last year. It said the $247m proceeds from the sale have been used to fund eligible green projects, as defined in the prospectus supplement. Separately, Vornado Realty Trust, a NYSE-listed Real Estate Investment Trust, has also published its first green bond reporting, as part of its annual sustainability report.

Social

Cardiff University has awarded ethically screened mandates to Rathbone Investment Management and Barclays Wealth. Rathbone was awarded around £60m (€83m) in medium-term cash reserves, while Barclays got some £70m in the university’s long-term cash reserves. Cardiff’s ethical investment policy prohibits investments in tobacco, armaments and firms without a Code of Ethics policy as per EIRIS guidelines.

Indonesian flag carrier Garuda is reportedly planning to issue its first ever global Islamic bond, or sukuk. The Jakarta Globe said the decision was made at an extraordinary general meeting of shareholders to approve the issue of up $500m in global sukuk to help finance general corporate programs.h6. Governance

The Principles for Responsible Investment (PRI) has gained its first signatory from Iran, a company called Sustainable Development Strategy International Group (SDS). Among other things, SDS describes itself as a consultant for investing in Iranian companies. It says that as part of its services, it reviews those firms with respect to their environmental and social impact. The PRI has listed SDS as a service provider and says it is satisfied with the level of information SDS has provided.

A report by ShareAction, the UK campaign group, has compared the responses of fund managers on some of the most controversial AGM shareholder resolutions of 2014, and its data shows that some managers back company management more often than others. The research, titled Asset Manager’s Voting Practices: In Whose Interest? looked at the UK’s 33 largest asset managers positions on eight ‘controversial’ votes, where more than 30% of shareholders voted against the companies’ recommendations, as well as four further shareholder resolutions on environmental and social issues. The research reveals that some UK managers tend to vote with management on controversial issues while others tend to vote against. Jo Mountford, Responsible Investment Officer at ShareAction and the report author, says: “Asset managers’ voting decisions have a strong impact on companies’ activities, so it is important that investors understand how these decisions are made. Transparency of voting records and rationales for votes is crucial for ensuring that asset managers are held to account for their decisions, and will help to drive careful consideration of these decisions in the industry.”

CalSTRS will now be able to exit its stake in weapons firm Remington Outdoor, maker of the gun used in the Sandy Hook school shooting, according to the New York Times. It said private equity firm Cerberus Capital Management would in effect let its investors sell their stakes in the company and transfer it to a separate vehicle. Citing a letter to investors, the paper said it was an “attempt to mollify” its pension fund investors, like the California State Teachers’ Retirement System.

Separately, CalSTRS has written to fellow shareholders in tire firm Titan International urging support for its ‘board declassification’ proposal which goes to the vote on June 5. The $191bn fund wants the board to reorganise “into one class subject to election each year” – saying it is intuitive that when directors are accountable for their actions, they perform better. The company is resisting the motion, saying its current structure is “in the best long-term interests of the company and its stockholders”.

ISS Corporate Solutions, the executive compensation arm of governance advisory firm ISS, has unveiled a web-based executive compensation tool providing a “clear line-of-sight” into the value and achievability of executives’ performance-based awards. The launch of Award Simulator comes as performance-based pay has become the “driving factor in total compensation” – leading to greater complexity and poor visibility into the value and likely achievement of performance awards, ISS said.