RI ESG Briefing, May 30: Investors back International Energy Agency on gas

Environmental

A group of institutional investors with $1trn in assets have welcomed the International Energy Agency recommendations on hydraulic fracturing, or fracking, for natural gas. The IEA’s new “Golden Rules for a Golden Age of Gas” follows proposed guidelines published by a group led by Boston Common Asset Management, the Investor Environmental Health Network and the Interfaith Center on Corporate Responsibility on May 16.

Scottish Widows Investment Partnership (SWIP) called the IEA’s rules “an excellent blueprint for building public trust and confidence in this new energy resource”.

The ‘Marguerite Fund’, the €710bn fund which has the backing of six leading European public financial institutions, has bought a 36MW part of EDF Energies Nouvelles’ Massangis onshore solar photovoltaic project, near Auxerre in France. The fund, backed by the Caisse des Dépôts et consignations, Cassa Depositi e Prestiti, European Investment Bank, Instituto de Crédito Oficial, KfW and PKO Bank Polski, secured financing via a loan facility from Crédit Agricole. Link

The BP Crisis as a “Preventable Surprise: Lessons for Institutional Investors”, a report on the fallout of the BP environmental disaster in the Gulf of Mexico has been published as a free download by the Rotman International Centre for Pension Management. The report is by Raj Thamotheram, former Head of Responsible Investment at AXA Investment Managers (AXA IM) and Maxime Le Floc’h, an Analyst at AXA IM. Charles Perrow, Emeritus Professor of Sociology, Yale University, called the report an: “Impressive review of the possible responses;  tough and specific. It highlights the differences between old and new ways of evaluating risk and deals with both prevention and resilience.” Website

Social

The UN Principles for Responsible Investment has extended its consultation on its new assessment methodology until June 7. The PRI released its new reporting framework last month. Link

Bridges Ventures, the sustainable growth investor, which counts several pension funds among its investors, has sold one of its landmark investments, The Hoxton Hotel in London, to Ennismore Capital. The exit will deliver a return of £13.3m to Bridges’ Sustainable Growth Fund I, representing an IRR of 47% and 8.8x total investment, and £1.9m to its Sustainable Growth Fund II, representing an IRR of 35% and 3.4x the total investment. The investment was key to regeneration of the Shoreditch and Hackney areas.

Australia’s RI Academy online investor training course has been accepted into the CFA Institute Approved-Provider Program. The Academy is run by the Responsible Investment Association Australasia (RIAA), whose 8th International Responsible Investment conference is held on August 30-31 in Melbourne. Link

FSinsight, the finance and sustainability platform, has announced the call for papers for the 2012 Moskowitz Prize for Socially Responsible Investing (SRI). The $5,000 prize competition promotes the concept, practice, and growth of social and sustainable investing and is open to authors of relevant high quality studies from all business disciplines. The submission deadline is June 30. Link. Governance

Almost a quarter of shareholders (24.75%) at Société Générale, the French banking group, backed a resolution filed by PhiTrust Active Investors, the governance activist, calling for the separation of directorship functions through the creation of a supervisory board and a management board, at its AGM on May 22.

The UK Investment Management Association (IMA) has told a government Treasury Select Committee’s inquiry into the corporate governance and remuneration of systemically important financial institutions (SIFIs) that failings in SIFIs’ governance contributed to the financial crisis. The IMA said government needed to find a balance between regulation and shareholder oversight. Liz Murrall, Director of Corporate Governance, said: “IMA has long been a supporter of engagement and over the last 10 years it has been transformed. It is important that any regulatory approach to a SIFI’s governance does not undermine the role played by shareholders in holding boards to account.” Although she said there is a limit to what engagement can achieve as asset managers do not run companies.

The World Bank’s private finance arm the IFC says it is advising Central Asian companies and banks on improvements to their corporate governance. It is organizing a corporate governance program to help directors and managers incorporate best international corporate governance practices. Link

French finance giant Axa has launched an internal gender diversity network called “AXA Mix’iN”, which aims to help more women reach management and executive positions. It will be headed up by two co-presidents: Amélie Breitburd, Head of Planning, Budgets, Results of the AXA Group, and Delphine Maisonneuve, Head of the Professionals market at AXA France.

HSBC, the banking group, has announced that it will pay the current Living Wage to all its contractors across the UK, including those who are employed via third party suppliers – extending the rate to over 2,900 cleaners, security guards and catering staff. It follows engagement from campaign group Fair Pensions and funds firm CCLA.

Wisconsin-based Community Bank & Trust has launched a putative class action against Bank of America, Citibank and J.P. Morgan Chase over alleged manipulation of the key London Interbank Offered Rate (Libor), according to legal website Law360. It said the alleged actions cost community banks between $300m-$500m a year. It follows legal action by pension funds in what has been seen as a potential multi-billion dollar case (RI coverage).