RI ESG Briefing, May 23: UK pension funds launch €292m ‘Investing for Growth’ initiative

The round-up of environmental, social and governance news


The United Nations Framework Convention on Climate Change (UNFCCC) has launched a survey on the Clean Development Mechanism, the Kyoto Protocol emissions reduction programme. “This survey will take approximately 20 minutes to complete, and we will use this important feedback to review and adjust priorities,” the UNFCCC said. The deadline for responses is June 3.

Equator Principles III, the third and “most robust” version of the guidance for environmental and risks in project finance, has been approved. The new version will be formally launched on June 4 at a conference hosted by Dutch bank ING in Amsterdam that will mark the principles’ tenth anniversary. Link

An influential alliance of leading UK firms have called for a 2030 carbon target for the power sector, saying that only “greater clarity” from the government can unleash the £110bn investment required to transform the UK’s electricity infrastructure. The call has been coordinated by the Aldersgate Group, the coalition of environment agencies, NGOs, think tanks and industry. Backers include ASDA, Aviva, Alliance Boots, British American Tobacco, Cisco, EDF, Eurostar, Marks & Spencer, PepsiCo, Philips, Reed Elsevier, Sky, The Co-Operative and Triodos Bank.


A group of five local authority pension funds in the UK are seeking expressions of interest from asset managers in a new investment initiative called Investing for Growth to deliver both financial returns and create a positive economic impact. The funds, the Greater Manchester Pension Fund, West Yorkshire Pension Fund, West Midlands Pension Fund, South Yorkshire Pension Fund and Merseyside Pension Fund, have set up a website for those asset managers seeking more information. Each of the funds involved in the initiative has agreed to invest up to £50m, or £250m (€292m) combined initially, and they are being advised by PIRC. The deadline for submission of proposals is July 5, with an information open day on June 19.

Brazil: Five new projects have been listed on BM&FBOVESPA’s BVSA social/environmental investment exchange. BVSA is a virtual donations platform in which individuals and companies contribute to social and environmental causes. The new projects have been selected in accordance with the eight UN Millennium Development Goals. Since launch in 2003, BVSA has raised more than BRL12.7m (€4.8m) for 107 projects. Link

Facebook has become the sixth company to join the Global Network Initiative, the Washington-based body that promotes freedom of expression and Internet privacy. It joins founders Google, Microsoft, and Yahoo!, as well as Evoca and Websense who joined the initiative in 2011. “Facebook’s decision to join GNI sends a signal to users, investors and other stakeholders alike,” said Bennett Freeman, Senior Vice President of Sustainability Research and Policy at US sustainable fund manager Calvert Investments.h6. Governance

The German Association of Critical Shareholders (DKA) has urged fellow shareholders to join it in voting against discharging Deutsche Bank’s management and supervisory board at the bank’s annual general meeting (AGM) today (May 23). In a counter-proposal released before the AGM, DKA said that the bank has not undergone a “cultural change” in the interest of sustainability. “The bank still maintains business relations with companies that disregard environmental and human rights; issues loans to producers of nuclear weapons and to exporters of arms to crisis regions; and speculates with agricultural commodities,” the DKA, which owns 60,000 Deutsche shares, said.

The Shareholder Rights Project, the initiative headed up by Harvard University Professor Lucian Bebchuk, has announced that 19 US corporate boards have been declassified (or un-staggered) and 13 declassification proposals have been passed as a result of its activities so far this voting season. The SRP works on behalf of public pension funds and others seeking to improve corporate governance at listed firms.

A group of leading UK investors have written to Laura Carstensen, Chairman of the Audit Investigation Group, reiterating their support for a regulatory backstop to audit firm tenure, as well as limits to non-audit fees. The letter was backed by the Universities Superannuation Scheme, RPMI Railpen, the Local Authority Pension Fund Forum (LAPFF), Legal & General Investment Management, Royal London Asset Management, the London Pension Fund Authority, the Environment Agency Pension Fund, Governance for Owners and the UK Shareholders’ Association.

Extractives industry body the International Council on Mining & Metals (ICMM) has issued a position statement on indigenous peoples. The new guidance, which updates an earlier statement from 2008, “strengthens member companies’ commitment to uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others.” It also outlines the ICMM’s view of Free, Prior and Informed Consent (FPIC).

The Society of Corporate Secretaries & Governance Professionals, the US not-for-profit body, and the Ernst & Young Corporate Governance Center have released a study of corporate governance practices and trends at 3,000 small and mid-sized US companies.
Link (registration required)

Students at Harvard University marched on the office of university President Drew Faust after it emerged that Agricola Brinzal, a 99.9% Harvard-owned forestry company operating in Chile, was accused of violating the country’s environmental laws. The students are demanding that Harvard explain the rationale behind its investment and adopt clear environmental, social, and governance protections.