RI ESG Briefing, May 20: Corporate green bond market ‘set to double’ – S&P

Environmental

The corporate green bond market is set to double to $20bn in 2014, according to a new report from Standard & Poor’s Ratings Services. The report – the Greening Of The Corporate Bond Market – found corporate green bond issuance is accelerating, not only because this aids diversification of investor pools for issuers, but also because of investors’ growing interest in implementing environmental, social, and governance goals. Link

Regency Centers Corporation, a developer and operator of grocery stores in the US, has become the first non-bank in the country to issue a green bond. Regency’s issue of $250m (€182m) of its 10-year debt was completed last week, with five US banks – among them JP Morgan, Bank of America Merrill Lynch and Wells Fargo – acting as bookrunners. Merrill Lynch, Pierce, Fenner and Smith were structuring agents. New York-listed Regency, said proceeds would be used for the acquisition or development of energy efficient properties.

Carbon Tracker, the UK-based research group whose work on Unburnable Carbon (2011) and Stranded Assets (2013) has done much to help frame the debate about fossil fuel investment/divestment, has won the award for Innovation in Communicating Sustainability at the Guardian Sustainability Awards of the UK daily newspaper. The judges said Carbon Tracker had “created a new vocabulary and has made a real rumble in the financial market that is hard to ignore!” Its latest research introduces the concept of ‘Carbon Supply Cost Curves’.

Social

Campaign group Human Rights Watch has released a new report showing that child labour is being used in US tobacco fields throughout North Carolina, Kentucky, Tennessee and Virginia, where 90% of the country’s tobacco is grown. The 138-page report, Tobacco’s Hidden Children, found that children reported vomiting, nausea, headaches, and dizziness while working on tobacco farms, all symptoms consistent with acute nicotine poisoning. Many also said they worked long hours without overtime pay, often in extreme heat without shade or sufficient breaks.

EIRIS, the UK-based ESG research house, is launching Investment Watch: Burma/Myanmar. It is in conjunction with this week’s first anniversary of the US government’s Burma Responsible Investment Reporting Requirements taking effect. The new service is designed to help investors make sound judgments about how companies are managing the conflict risks related to doing business in Burma/Myanmar.

Bridges Ventures, the London-based social venture capital investor, has invested in Alina Homecare, an organisation established to provide high quality homecare across the South of England. The stake is the latest investment of the Bridges Sustainable Growth Fund III, which had its final close at £125m last year. Alina aims to provide specialised training for care staff and work closely with service users, local authorities, the National Health Service and other organisations.h6. Governance

The more than $300m Appleseed Fund, the US mutual fund managed by Chicago-based Pekin Singer Strauss, has filed a shareholder resolution calling for gas drilling firm Nabors Industries to begin publishing an annual sustainability report that will outline the various environmental, social, and governance-related risks that the company faces, as well as the processes that the company is employing to mitigate these risks. Nabors has left its shareholders “largely in the dark” said Manager of Shareholder Advocacy Matthew Blume.

The Principles for Responsible Investment (PRI) has set up a steering committee to look at hedge funds. According to a PRI spokeswoman, it follows an informal work group on the theme that came together in 2011. Although the group produced a paper in November 2012, no additional work has been done since. This is why the PRI favoured the establishment of a more formal body, the spokeswoman said. The steering committee, which currently includes 11 representatives from asset owners and hedge fund providers, will have its first meeting next month.

The five New York City Retirement Systems under Comptroller Scott Stringer – comprising five funds with a total of $147bn under management – have withdrawn shareholder motions on supply chain sustainability at computer giant IBM and four other companies, according to a report in Pensions & Investments.

The Investment Management Association, the UK fund industry body, says institutional investors are continuing to demonstrate their commitment to stewardship by increasing the headcount responsible for engagement by almost 400 people, in the year to September 30. The figures come in the IMA’s fourth report on the Stewardship Code. The majority of respondents were asset managers that collectively manage £708bn – or 32% of the UK equity market. The IMA found that the number of signatories to the code has risen to 274 and that the proportion of asset managers that report that stewardship is referred to in their clients’ mandates has risen to 83%.

Sodali, the corporate governance and shareholder services consultancy, has teamed up with China-based management consultancy King Parallel Consulting to provide shareholder response services to companies in mainland China, Hong Kong and Macau. The services will mainly focus on corporate governance, strategic advice to boards and executive management, shareholder response advisory and transactional services.

Investors have expressed their “deep concerns” on the occasion of Dow Chemical’s annual meeting on May 15, ahead of the 30th anniversary of the Bhopal disaster of December 3, 1984. US sustainable fund manager Calvert Investments said it “remains deeply concerned over the continuing suffering of the victims of that tragedy as well as the damage to Dow’s business opportunities in India incurred by acquiring Union Carbide in 2001”. It called on Dow to act on the recommendations made in its recent shareholder resolution calling for Dow to assess short and long term financial, reputational and operational impacts the legacy of the disaster may have on Dow’s Indian and global business prospects.