RI ESG Briefing, Nov. 12: Europe’s ESMA clarifies shareholder ‘acting in concert’ rules

Environmental

The European bank for Reconstruction and Development (EBRD) is considering a loan of €54m for a 50MW wind power plant in the Yereymentau region of Kazakhstan. It said: “As one of the first large-scale wind energy projects in Kazakhstan, the project has the potential of becoming an example of successful implementation of a project-financed renewable energy project in the country.” The project is owned by Samruk Green Energy LLP, a newly created renewable energy subsidiary of Samruk-Energo – which is itself 100% owned by the $78bn Samruk-Kazyna sovereign wealth fund.

The Natural Capital Declaration, the finance-led and CEO-endorsed initiative committing financial institutions to integrating natural capital considerations, has been declared a ‘Biodiversity Champion’ by the Convention on Biological Diversity. More than 40 financial institutions, and over 30 supporter organizations, are signatories to the Declaration, bringing with them a range of expertise and capabilities.

Nasdaq-listed US solar firm SolarCity has announced a $54m private placement, secured by a pool of photovoltaic systems and related leases and power purchase agreements.

The Executive Board of the Clean Development Mechanism (CDM) has proposed cutting the budget for running the scheme by 14.2%, according to a Reuters report citing the CDM. The board wants a $5.5m cut in the 2014 budget, capping spending at just under $32.9m, it added.

Social

TIAA–CREF, the US academic sector financial services organization with $542bn in assets under management, has announced $27m of credit-tenant loan (CTL) financing for a new U.S. Department of Veterans Affairs outpatient clinic. The Greenville, South Carolina, clinic is the latest in a series of public-private partnerships between TIAA–CREF and the Department of Veterans Affairs. Since 2011, TIAA–CREF has provided a total of $179m in such financing across the US. “Public-private partnerships such as these are attractive investment opportunities that also allow us to support a core service for our nation’s veterans,” said TIAA–CREF Asset Management President Robert Leary.

ResponsAbility Investments, the Switzerland-based microfinance specialist with around $1.4bn under management, has made a loan of $5m to Peruvian microfinance institution Edpyme Rai, according to industry site Microcapital Brief.

A progress report published by Cranfield School of Management shows that women now account for 19% of FTSE 100 and 15% of FTSE 250 board positions – the highest level since Cranfield began monitoring the number of women in UK boardrooms in 1999. In the last six months 27% of FTSE 100 and 30% of FTSE 250 new appointments went to women.h6. Governance

The European Securities and Markets Authority (ESMA), the European financial supervisor, has sought to clarify ‘acting in concert’ rules governing investor cooperation. ESMA said investors entering into discussions on possible matters to be raised with the company’s board, for example, wouldn’t lead to the conclusion they are acting in concert. The statement is in response to a request by the European Commission for clarity and ESMA Chair Steven Maijoor said it should provide the needed reassurance for shareholders over one of the “cornerstones” of listed companies’ corporate governance model, allowing them to hold their boards to account.
The Investor Responsibility Research Center Institute, the US governance body, is accepting submissions for its third annual competition for research that examines the interaction of the real economy with investment theory. Two papers – one academic and one practitioner – each will receive the “2014 IRRC Institute Research Award” along with a $10,000 award. Award submissions will be accepted through March 31, 2014. Among the judges are former CalPERS and Hermes chief Mark Anson, Robert Jackson of the Ira M. Millstein Center for Global Markets and Corporate Governance, Erika Karp, the former UBS executive who runs Cornerstone Capital, Legg Mason Capital Management Chairman Bill Miller and Nell Minow, co-founder of GMI Ratings.

Mariner Investment Group, the US-based alternative investment group that’s majority owned by Japan’s ORIX, the new parent of Dutch fund firm Robeco, has become a signatory to the Principles For Responsible Investment (PRI). Mariner, which has around $11.7bn under management, also said it has begun to incorporate environmental, social, and governance (ESG) research, ratings, and screening tools from MSCI into the investment decision-making processes for one of its big client mandates, adding: “ Mariner is one of the first alternative asset managers to use MSCI ESG Research and analytics to analyze fixed income and long-short investments.”

The amount of investor activist campaigns against companies has more than doubled in three years, according to a Financial Times report citing data commissioned by law firm Linklaters. It said the past year there have been more than 415 “instances of corporate activism” worldwide – up from 172 in 2010. Another finding was that activist positions have also outperformed the broader market.

HSBC Chief Executive Stuart Gulliver has admitted that the lack of women in senior positions has hurt the bank, according to an FT report. The bank was “too pale and male for our own good” he was quoted saying in a speech to the Women’s Foundation in Hong Kong. Greater inclusion – whether by race, religion and sexual orientation – was not about being “cuddly”, rather it was to do with competitive advantage.