RI ESG Briefing, May 29: South African government employees’ fund in renewables push

Environmental

South Africa’s Z1trn (€79bn) Government Employees Pension Fund, Africa’s biggest has allocated SAR13bn to three new funds aimed at boosting employment and economic growth. Z5bn will go into an Environmental Sustainability Fund which will invest in energy renewables and efficiency, energy storage, clean energy and recycling projects. The fund is expected to generate 500MW of new, renewable energy and 300-million litres of biofuel per annum – and create an estimated 3,000 jobs.

The final turbine of the pension fund-backed 400MW Anholt wind farm off the coast of Denmark has been installed. The next step is connection to the electricity grid for the project, co-owned by DONG Energy and the PKA and PensionDanmark funds. More than 75 turbines are already in operation with a capacity of 270MW; the official opening is September 4.

Eurofideme 2, the French venture fund managed by Natixis Asset Management’s Mirova arm, has formed a Swedish 50/50 wind farm joint venture. It has teamed up with forestry group Holmen to build and operate a €76m, 51MW onshore wind farm in the Stockholm area. The project, consisting of 17 Vestas turbines with an expected annual production of 165GWh, is scheduled for launch at the end of 2014. Link

Low Carbon Accelerator, the AIM-listed specialist low-carbon investment company, says it will shortly issue a circular to shareholders that will set out proposals for de-listing, a members voluntary winding-up and the distribution of capital. LCA in January had agreed to sell substantially all of its assets to Sterling Planet Inc. Link

Social

BNY Mellon, the US-based custodian and asset manager, says that across its businesses, roughly $35bn (2.5% of its total assets) are explicitly screened for environmental, social and governance factors – up from $17.8bn in 2011, according to its new corporate social responsibility report. The firm adds that 23% of its assets under management are “currently covered” by the Principles for Responsible Investment (PRI).

Exchange operator NASDAQ Dubai says is preparing to open a platform on which investors can trade Sukuk (Islamic bonds) and conventional bonds. The tradable securities will initially comprise at least 12 Sukuk and bonds that are listed on the exchange, with a nominal value of $10.9bn. The platform will be available to institutional and high net worth investors.h6. Governance

Proxy firms Institutional Shareholder Services (ISS) and Glass Lewis have supported a shareholder proposal by the $52.4bn UAW Retiree Medical Benefits Trust and other investors at Wal-Mart asking the company to publicly disclose whether it has clawed back pay from executives whose actions have caused financial harm to the company. Major institutional investors including the Pennsylvania Treasury Department and the Office of New York City Comptroller John Liu have also signalled their support for the proposal. “We welcome the support of ISS and Glass Lewis and the institutional investor community ahead of Wal-Mart’s annual meeting,” said Meredith Miller, Chief Corporate Governance Officer for the Trust.” Link

ESG research firm EIRIS has welcomed the US government’s final Burma Responsible Investment Reporting Requirements. The new ruling mandates US corporations newly investing in Burma to report on their operations, policies, procedures and impacts. CEO Peter Webster called it a “great step forward for investors across the globe”.

New York Comptroller Thomas DiNapoli has withdrawn a shareholder proposal calling for a sustainability report at apparel firm Ralph Lauren, according to the Wall Street Journal. It comes after the company said it would put the report on its website when filing its next annual report in May 2014. “The company is prepared to issue a sustainability report to shareholders, which will include the company’s definition of sustainability and a review of its policies, practices and metrics related to long-term social and environmental sustainability,” the WSJ quoted Ralph Lauren Vice President Yen Chu as saying.

The Securities and Exchange Commission charged proxy adviser Institutional Shareholder Services for “failing to safeguard” clients’ confidential proxy voting information in a number of significant proxy contests. The SEC found that an ISS employee provided a proxy solicitor with information revealing how more than 100 ISS institutional shareholder advisory clients were voting at company annual general meetings. ISS agreed to settle the charges by paying $300,000 and retaining an independent compliance consultant.

Hermes, the fund firm that’s owned by the BT Pension Scheme, was critical of high pay at Deutsche Bank’s annual general meeting last week, according to the Financial Times. Hermes was speaking on behalf of both the BTPS and Dutch giant PGGM, the FT added.