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RI ESG Briefing, Nov. 17: YES Bank, GRI, Bridges Ventures, UKSIF, ABP, CMi2i Proxy, TIAA-CREF

The round-up of the latest ESG news

Environmental

India’s YES Bank and the London Stock Exchange (LSE) have signed an agreement under which YES will, by December 2016, issue a $500m (€466m) green bond on the exchange. In a statement, the LSE said the Indian bank could also list Global Depositary Receipts (GDR) on the exchange as part of its $1bn equity capital raising plans. Last February, YES Bank was the first Indian financial institution to issue a green bond, raising $180m in the process. The bond was assured the international consultancy KPMG.

US private equity firm Blackstone seeks a buyer for its 80% stake in German offshore wind park Meerwind Sued/Ost, Reuters reports, citing industry sources. The 288MW park, located 23km off the coast of the North Sea island Helgoland, was completed last year and provides power for up to 360,000 households. Reuters said the park could fetch around €1.4bn, basing its estimate on the prices quoted in similar deals done recently. Blackstone declined to comment. The other 20% stake in Meerwind Süd/Ost is held by German wind project developer Windland.

The Environmental Defense Funds’ (EDF) Investor Confidence Project has launched its Investor Network to help connect investors in search of quality energy efficiency projects with project developers of buildings in need of capital. The initiative is said to offer investors “a common language to compare project risks and savings makes projects simpler, decisions easier, and project performance more reliable”. Link

Social

The Global Reporting Initiative (GRI), the sustainability reporting standards body, has launched
a document highlighting the connections between its G4 Reporting Guidelines and key concepts of the United Nations Guiding Principles on Business and Human Rights. These include due diligence, grievance mechanisms and impact assessments – undertaken both for operations and suppliers – which are also recurring concepts throughout G4, the GRI said.

HCT Group, the UK social enterprise bus operator that uses its surpluses to provide community transport services and training, has provided a “full and successful” exit for the social investors including Bridges Ventures who backed it in 2010. Bridges had invested in HCT via its Social Entrepreneurs Fund.h6. Governance

The UK Sustainable Investment and Finance Association (UKSIF) has expressed “extreme disappointment” that the UK government will not clarify the distinction between financial and non-financial factors in fiduciary duty regulations. A 2014 Law Commission report into the fiduciary duties of investment intermediaries said that pension scheme trustees should take into account all financially material factors including ESG and may take non-financial factors into account in certain circumstances and examined the positive role of good stewardship. It recommended that the distinction between financial and non-financial factors be clarified in law via Investment Regulations.

Campaign group PAX has reportedly claimed that Dutch civil service pension titan ABP still has almost €1bn invested in companies involved in some way with nuclear weapon manufacture. The organization (previously called Pax Christi) said the fund’s holdings were “indefensible”, according to a report in IPE.com. It quoted an ABP spokesman as saying the fund’s exposure to nuclear weapons was not deliberate, citing the examples of US plane maker Boeing and tech firm Honeywell.

CMi2i Proxy, the European corporate governance advisory firm, has published its second Annual Investor Corporate Governance Report – and found that 90% of investors see risk management as key, compared to 30% of companies. And there has been a marked increase in investors’ requests for engagement with companies; 61% of investors expect increased contact over 2016. Another finding is that investor-to-investor communications is “increasing substantially” and that 94% of investors have been contacted by other shareholders.

US investment giant TIAACREF has been accused of involvement in ‘land-grabbing’ in Brazil, according to a New York Times report citing an investigation by GRAIN, the campaign group, and Brazil’s Social Network for Justice and Human Rights. The report said documents showed that TIAACREF’s “labyrinthine” activities may skirt rules designed to ban such large-scale foreign ownership of agricultural land. The report said a TIAACREF spokesman declined to discuss the farmland acquisitions on the record. TIAACREF, the report notes, launched a global fund in 2012 with investment from a range of major global pension funds.