RI ESG Briefing, May 22: Updated Global Reporting Initiative guidelines released

Environmental

A new investor briefing on international oil companies’ [IOCs] risk in the Russian Arctic has been put together by activist groups ShareAction (formerly Fair Pensions) and Greenpeace, looking at the firms’ alliances with Russia’s Gazprom and Rosneft. “These alliances expose IOCs and their shareholders to risks including poor environmental and safety performance, questionable corporate governance, an unpredictable political, regulatory and fiscal regime and a lack of corporate transparency,” they say. The 40-page report is available here

German offshore wind park developer PNE Wind has raised €66.3m with a bond issue. The issuance of the five-year bonds with a coupon (interest rate) of 8% was run by Hamburg-based private bank M.M. Warburg and the German arm of UK investment bank Close Brothers. The bonds began trading on Frankfurt’s stock exchange on May 15. A PNE spokesman estimated that around two-thirds of the bond’s subscribers were institutional investors and one-third private investors. One of PNE’s major shareholders is BWVA, a €10.3bn pension fund for doctors and veterinarians in Baden-Württemberg which has a 3% stake.

Social

The Association for Sustainable & Responsible Investment in Asia (ASrIA), the Hong Kong-based not-for-profit association, has become a supporter of the Natural Capital Declaration (NCD). The NCD is a commitment by financial institutions across the globe to address the value of natural resources within their financial products and business operations.

Addressing financial short-termism will require a “re-think of our financial system, as well as a list of policy measures”. That’s one of the conclusions of Brussels-based not-for-profit group Finance Watch’s first ever annual report. Governance

The ‘next generation’ of the Global Reporting Initiative’s sustainability reporting guidelines has been launched. The so-called ‘G4’ was unveiled at the GRI conference in Amsterdam today, having been “significantly revised and enhanced” to reflect current and future trends in sustainability reporting. The new version would help in generating material sustainability information for integrated reports. Other enhancements include harmonization with other frameworks like the Organisation for Economic Cooperation and Development’s guidelines for multinational enterprises, the UN Global Compact and the UN Guiding Principles on Business and Human Rights.

Three shareholder proposals on ESG issues at Illinois-based fertilizer maker CF Industries gained majority shareholder support at the company’s annual meeting on May 14. Proposals on board diversity, political use of corporate assets and sustainability reporting gained 51%, 66% and 67% support respectively. They had been submitted by the New York City Pension Funds, the New York State Common Retirement Fund and the Board of Pensions of the Presbyterian Church respectively. Law firm Davis Polk said the votes were surprising given that there were “no obvious signs of any active [investor] campaigns against the company”.

The Principles for Responsible Investment (PRI) Initiative has received a donation of £38,000 (€44,322) from the Marathon Club, a collaboration of 18 investors that was formed in 2004 to encourage long-term investment. The donation will support the PRI’s new Research & Public Policy work stream.

The UK’s National Association of Pension Funds (NAPF) has launched a guide to responsible investment to encourage its members, who control £900bn, “to create an investment climate where consideration of ‘extra-financial factors’ is the norm”. The guide, which updates the NAPF’s guidance from 2009, also looks at hedge funds, real-estate and corporate bonds, and suggests key points pension funds should consider and questions they should ask of their investment managers.