RI ESG Briefing, May 6: CalPERS urges support for Shell climate resolution in SEC filing

The round-up of the latest ESG news


The California Public Employees’ Retirement System, the largest US pension fund, has written
to fellow shareholders in Royal Dutch Shell calling for them to support a shareholder resolution on strategic resilience at the oil major’s AGM on May 19. “Resolution #21 is a management supported resolution filed by a coalition of asset owners assembled by CCLA Investment Management,” CalPERS says, adding it believes companies should provide accurate and timely disclosure of environmental risks and opportunities associated with climate change. The giant fund has also continued its letter writing campaign on ‘proxy access’ – with new firms targeted including Chevron, McDonald’s and Exxon Mobil (see separate item on Kohl’s below).

Members of three Danish pension funds have reportedly voted to divest from fossil fuels. Academics, civil engineers and architects from three of six funds voted to sell off coal and high-risk oil and gas, the Guardian said. But it added that lawyers, vets and other engineers voted against divestment. “We are very happy with the success we have had so far,” it quoted Copenhagen University Professor Thomas Meinert Larsen of the Danish Fossil Free campaign as saying. He added the Danish business association for the pension and insurance industry has put divestment on the agenda of their annual meeting this week.

There is a “wide divergence” in how prepared European utilities are to meet the costs and opportunities presented by climate change. That’s a key finding of new sector research from environmental data body CDP. In ‘Flicking the switch: are electric utilities prepared for a low carbon future’ the CDP ranks European utilities in a league table based on a number of different emissions-related metrics. “This research, the second in our series, has real value for investors at a time when the utilities sector is going through significant transformation,” said James Magness, head of investor research at CDP. The organization plans further research over the next year on sectors including materials, metals & mining, oil & gas and consumer goods.


Germany-based index firm Solactive has launched the Solactive Oekom Ethical Low Volatility Index to track low volatility stocks screened by ESG house Oekom Research. BNP Paribas has licensed the Index to launch a wide range of products, from capital protected to more complex structures designed for both retail and institutional clients in Germany, Austria and Scandinavia.

Private debt and private equity are the most prominent instruments used by impact investors, finds the new annual impact investment survey from JPMorgan and the Global Impact Investment Network (GIIN). The survey, which analysed 143 large investors who manage $60bn in impact investments, finds they plan to invest a further $12.2bn between them in 2015, up 16% from last year. Among other key findings are that there’s a shortage of quality deals and a lack of appropriate capital.

​h6. Governance

CalPERS says it has received endorsements for its board accountability proposal at retailer Kohl’s Corporation from proxy firms Glass Lewis and ISS Proxy Advisory Services. The advisors are supporting Proposal 5 by CalPERS at the company’s annual shareowner meeting on May 14 in Menomonee Falls, Wisconsin. The non-binding proposal asks Kohl’s to add a proxy access provision to their bylaws that would allow large, long-term shareholders to be able to nominate directors to the company’s board, CalPERS added.

The Canadian Securities Administrators (CSA) have adopted a new national policy on Guidance for Proxy Advisory Firms. It provides guidance on recommended practices and disclosure for proxy advisory firms to promote transparency in the services they provide to clients and to foster an understanding among market participants. “The Policy recommends best practices that are intended to address the concerns of market participants while recognizing that proxy advisory firms play an important role in the voting process,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers regulator. He added the points of view of all stakeholders, including institutional investors and issuers, has been taken into consideration.

Nordea Asset Management, the largest Nordic fund company with €174bn in assets under management, has reportedly added US aerospace giant Boeing to its exclusion list over its involvement in making components for nuclear submarines. The Financial Times cited Nordea’s corporate governance head Sasja Beslik as saying: “Boeing is in the process of developing a new nuclear programme, [which means] we cannot engage with them.” The FT quoted Boeing as saying it was “proud” to support airlines, and US and allied military and government customers in 150 countries.

Eumedion, the Dutch corporate governance platform, says the proposed review of the European Prospectus Directive should not be “at the expense of an adequate level of investor protection”. It comes in response the European Commission’s consultation document on the review of the Prospectus Directive, which aims to make it easier for companies to raise capital throughout the EU and lower costs. Link

There’s been a “marked improvement” in hedge fund managers’ approach to ESG, according to a survey from Unigestion, the institutional asset manager with $17.8bn under management. Whilst the survey revealed that 60% of hedge fund managers were still reluctant to introduce ESG criteria into their investment approach, this was a “big improvement” since the survey was last conducted in 2011, when 75% of managers were reluctant.

A new version of a conflict minerals reporting template has been launched by the Conflict-Free Sourcing Initiative, the body founded in 2008 by members of the Electronic Industry Citizenship Coalition (EICC) and the Global eSustainability Initiative. The new Conflict Minerals Reporting Template V4.0 aims to facilitate transfer of information throughout the supply chain in support of conflict-free sourcing. It’s downloadable from the CFSI website.