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RI ESG Briefing, May 8: NY Comptroller presses oil firm on gun lobby contributions

The round-up of environmental, social and governance news

Environmental

French energy firm GDF Suez will reportedly become the latest private sector firm to issue a green bond. According to Global Capital, GDF Suez is conducting a roadshow with potential investors this week and plans to issue the bond shortly. The size of the issue is not known, though Global Capital quoted a banker as saying that GDF Suez’s issues in the past have been around €750m. Crédit Agricole and Citigroup were named as the bond’s bookrunners, and Vigeo, a Paris-based ethical rating agency, is to certify its green credentials. Separately, GDF and its partners EDP Renovaveis, Neoen Marine and Areva have reportedly won a tender to build two 500MW wind projects off the northern French coast south of Calais.

China is reportedly launching its first carbon-linked financial product. China Daily said it would be a debt note linked to carbon offsets on the Shenzhen Emissions Exchange that would be issued by a subsidiary of China General Nuclear Power Group. The company would invite investments of up to CNY1bn (€115m) in the medium term note with a five-year duration.

The World Bank’s IFC arm has teamed up with Asia Green Capital Partners, a renewable energy developer and investor, to promote renewables such as wind and solar power in Indonesia and across South East Asia. The agreement will enable IFC InfraVentures, IFC’s early stage project development fund, and Asia Green Capital to develop a series of projects to address Indonesia’s growing demand for power. The first project is the 62.5MW Jeneponto 1 wind farm in the South Sulawesi province. Link

Social

The New York City Comptroller, representing five pension funds with $144bn (€103bn) in assets, has written to Texas-based oil and gas firm Clayton Williams Energy demanding full disclosure of the firm’s contributions to the National Rifle Association, the US gun lobby. The letter was referenced in a blog published by the Huffington Post. In it, NYC Comptroller Scott Stringer says: “Absent a compelling corporate rationale, such payments would exacerbate longstanding investor concerns regarding the ability of the board to exercise independent oversight of [founder and CEO] Mr. Williams.”

The UK government has started a consultation on its proposed £40m (€48.6m) sustainability fund for charities and social enterprises that work with vulnerable and disadvantaged groups. According to a report in Civil Society, the fund would prioritise organisations with turnover of up to £1.5m. The deadline for responses to the consultation is July 24.h6. Governance

Swiss banking giant UBS faced a fair amount of opposition from its shareholders at its AGM yesterday (May 7), with 11% of them voting against its pay proposals for 2013 and 12% voting against discharge of its board and management for the year. The “no” camp was led by Swiss proxy firm Ethos, which had recommended shareholders reject discharge of UBS executives and the pay proposals. Ethos cited the discrepancy between UBS’ wish for higher bonuses and its decision to raise litigation provisions as the reason.

New York State Comptroller Thomas DiNapoli, on behalf of the Common Retirement Fund, is calling for the board of shoe firm Skechers to be declassified and for all directors to stand for election annually from 2015. “We believe that the ability to elect directors is the single most important use of the shareholder franchise,” Di Napoli says in a supporting statement. The company is resisting the motion, set to be voted on at its AGM on May 22.

Canada’s Bank of Montreal has completed its previously announced acquisition of F&C Asset Management, the UK-based fund firm. The deal took place via its BMO Global Asset Management (Europe) subsidiary. It means BMO Global Asset Management now has 24 offices in 14 countries serving clients across five continents. F&C will continue to operate under CEO Richard Wilson and his team.

The more than $400bn National Pension Service of Korea is to take a very cautious stance on governance, according to a Financial Times report citing Chairman Choi Kwang. He was quoted by the paper as saying: “I’m not saying we are not interested in better governance. But the major business of the NPS is not making better governance systems.” Instead, its main focus was on getting a greater investment returns.

CtW Investment Group, which advises US labor pension plans with over $250bn of assets, has called for shareholders to vote against management say on pay at fast-food chain McDonald’s annual meeting on May 22. “As you are no doubt aware, McDonald’s financial and operational performance has been disappointing for several years,” CtW says, adding the firm has not modified its executive pay practices as it faces a string of challenges to its business.