RI ESG Briefing, May 24: PGGM, Trucost, VW, BlackRock, Industriens, shell companies

The round-up of the latest environmental, social and governance news

Environmental

Dutch pension manager PGGM criticised Royal Dutch Shell’s climate change policy ahead of its AGM today (May 24). “We are not yet convinced Shell has sufficiently internalised the consequences of climate change in its strategy and future plans,” the investor said in a statement published on its website (Dutch). But it would not vote for a resolution at the meeting filed by activist group “Follow This” directing the oil giant to transform itself into a “sustainable energy” company.

Norway’s sovereign wealth fund could be forced to widen its coal divestment campaign after a majority of parties in the country’s parliament announced they want to tighten guidelines governing the $850bn fund, according to Bloomberg. A group led by the Labour party’s Torstein Tvedt Solberg and supported by the Greens, the Socialist Left, the Liberals and the Christian Democrats wants to ban the fund from owning companies whose coal production or consumption is “large on a global scale”, even if it makes up less than 30 percent of their businesses. Also in the crosshairs are company subsidiaries who produce or consume coal, coal transportation firms and oil sands producers.

Trucost, the UK-based environmental data group, has teamed up with Chinese financial services company Golden Credit Rating to create a practical framework to measure the environmental benefits of green bonds in a way that is “consistent and efficient”. The partners will work closely with stakeholders such as the People’s Bank of China’s Green Finance Committee. The green bond assessment framework is due to be published in September 2016. A

PensionDanmark, one of Denmark’s largest pension funds, is set to invest in British offshore wind farms for the first time. The fund will invest DKK2.8bn, through the Copenhagen Infrastructure Partners’ I and II funds, in the Beatrice wind farm in Scotland (a €2.4bn project set to be completed in 2019). And Industriens Pension is reported PensionDanmark to be the largest single backer of Hermes Investment Management’s acquisition of a 17% stake in UK utility Southern Water, contributing €147m to the deal.

Social

Scott Stringer, the New York City Comptroller, has revised the New York City Retirement Systems’ guidelines on corporate governance principles and proxy-voting guidelines, adding more of a focus on disparate pay ratios and LGBT (lesbian, gay, bisexual, and transgender) inclusion on boards. Stringer wrote, “[w]e overhauled our proxy guidelines so companies, and the members of the city’s retirement system, know our expectations”.

The International Seafood Sustainability Foundation (ISSF), the global coalition of scientists, the tuna industry and World Wildlife Fund (WWF), says it has terminated the membership of tuna trader JFE Shoji Trade America due to lack of compliance with ISSF’s conservation measures aimed at improving global tuna fisheries.h6. Governance

Three investor groups have reportedly called for a new, independent investigation into Volkswagen’s emissions test-rigging scandal. Reuters quoted German investor body DSW and governance outfit Deminor as saying shareholders should be allowed to vote on launching such an investigation at VW’s AGM next month. And BT Pension Scheme-owned Hermes Equity Ownership Services has also demanded an independent inquiry, the report added.

Blackrock, the US fund giant, managing assets in the region of $4.6tn, has been attacked and petitioned by US consumer watchdog, SumOfUs for not doing enough to tackle high pay at some of the world’s largest companies. It is reported that the fund manager, which is subject to a proposal on executive pay at its upcoming AGM today (May 25), has voted in favour of US pay reports on 97% of occasions between July 2014 and June 2015.

Goldman Sachs’ shareholders have ratified the latest compensation package of Chairman and CEO, Lloyd C. Blankfein, and other senior executives by a 66% vote, despite opposition from major pension funds and proxy-voting advisory firms. The Canada Pension Plan Investment Board, California State Teachers’ Retirement System, Florida State Board of Administration, Ontario Teachers’ Pension Plan, and Texas Teacher Retirement System all opposed the executive pay package and also voted in support of an Independent Chairman, a proposal which was also rejected by a 70% vote by shareholders.

Twenty-two investors, including Boston Common Asset Management, Domini Social Investment
, and Trillium Asset Management, managing over $505bn in assets, have sent an open letter to the US Congress calling for the passage of bipartisan legislation to combat the issue of anonymously-owned ‘shell companies’ and related corruption and criminal activity. The legislation would require all American companies to disclose the real people who own or control them, and to keep that information updated.

A report prepared for Scottish government ministers suggests that preferentially awarding public sector contracts to companies with more women serving in senior positions could be used to get more female executives and board members into companies. The report, called “Increasing Representation of Women on Private Sector Boards in Scotland”, also suggests that companies without female bosses or directors could even be disqualified from competing for lucrative government contracts. Scotland has already launched a campaign to boost female board appointments called Partnership For Change, which aims for a 50/50 split between men and women on Scottish company boards by 2020.