RI ESG Briefing, May 31: OTPP backs systemic review of Canadian proxy voting

Environmental

The £38bn (€47.5bn) BT Pension Scheme, the largest UK pension fund, has bought a minority stake in water utility Thames Water. The BTPS was acting through its custodian trustee BriTel Fund Trustees Ltd; the deal was arranged by infrastructure advisor Hermes GPE.
A week of demonstrations over environmental issues and pay against a mining project by Swiss company Xstrata at a copper mine in Espinar province in Peru has led to the death of two protesters. Peruvian police have arrested the leader of the anti-mining protests after the government declared a state of emergency in the province.

A new white paper by Ceres, the US environmental investor coalition, supports a federal agency’s proposal to take a cautious approach to oil shale production in the western US. Ceres backs the Bureau of Land Management’s decision for oil shale production in Wyoming, Utah and Colorado to be based on “Research, Development, and Demonstration” (RD&D) leases only. The oil shale reserves beneath the three states in the Green River Formation are estimated to hold more than three times the proven reserves of Saudi Arabia. However, the Ceres paper cautions against issues including technological uncertainty for extraction, market pricing risk (the viability of shale gas extraction depends heavily on the price of oil) and water use and environmental risks.

Social

The new French government is expected to enact next month an election pledge to limit top executive pay at majority state-owned companies to 20 times that of the lowest paid employee. The French state owns majority stakes in companies including EDF, the energy company, and Areva, the nuclear plant builder.

US SIF Foundation, the public education and research arm of the US Social Investment Forum (US SIF), has started the research for its 2012 Report on Sustainable and Responsible Investing Trends in the United States. The organization is contacting more than 500 investment management and advisory firms, and more than 1,000 public plan sponsors, foundations, educational endowments, faith-based institutions and other institutional asset owners, to measure the growth of sustainable and responsible investing in the US.h6. Governance

The C$117bn (€91.7bn) Ontario Teachers’ Pension Plan has called for an “independent systemic review” of the Canadian proxy voting system in a submission to the Ontario Securities Commission. “An independent review will require a significant expenditure of funds, but without such a review we do not believe that the OSC will be in a position to evaluate the integrity of the system,” the Toronto-based fund says. It added it is not concerned about the role of proxy advisers, because it evaluates its voting carefully and casts its votes appropriately. Link

New York State Comptroller Thomas DiNapoli, the trustee of the New York Common Retirement Fund, has written to fellow shareholders urging them to withhold their votes from directors Burns Hargis and Richard Davidson at controversial gas firm Chesapeake Energy’s annual meeting. Hargis and Davidson are the only two directors up for election at the June 8 AGM.

Eurosif, the European Sustainable Investment Forum, and SIF Japan, the Social Investment Forum Japan, have become the latest responsible investment bodies to back the Natural Capital Declaration. The declaration is a statement to be launched at the Rio+20 summit in June by the financial sector committing to work towards integrating natural capital criteria into financial products and services.

US listed companies will be subject to increased investor pressure on executive remuneration beyond the “shareholder spring”, according to research from business advisory firm FTI Consulting. It also found that investors expect greater board independence as the basis to protect shareholder interests, provide quality oversight and ensure effective governance. Link

US business group the Conference Board has issued a briefing on linking executive compensation to sustainability performance. Compiled by Thomas Singer, a research associate at the organisation, the briefing is available via this link

Broadridge’s retail investor-focused proxy voting site proxyvote.com is facing criticism from activists that the system favours company management, according to a Reuters item. It quoted Broadridge executives saying the site does not “skew votes” and that it conforms to voting rules.