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RI ESG Briefing, Nov. 20: Interfaith Center on Corporate Responsibility to rate seven US banks

The round-up of environmental, social and governance news

Environmental

The Interfaith Center on Corporate Responsibility (ICCR) is to score seven leading US banks on executive compensation, political contributions, responsible lending and risk management. The ICCR, which represents 300 member organizations with over $100bn in assets, will release a new scorecard on Bank of America, Bank of New York Mellon, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo today (November 20).

The business community remains “largely unaware” of the deforestation risks in their own supply chains, according to new data from the CDP’s forests program. On behalf of 184 investors with $13trn in assets, the former Forest Footprint Disclosure Project that was absorbed the former Carbon Disclosure Project last year, asks companies to disclose their exposure to deforestation risks through their use of five agricultural commodities that are responsible for most deforestation: palm oil, soy, biofuels, timber and cattle products. Link to report

Danish labour market pension fund ATP has bought the office premises of DONG Energy in Gentofte, north of Copenhagen for DKK1.9bn (€254.7m). Energy and renewables group DONG has entered into a 15-year lease-based agreement with ATP, which owns 5% of the company following a deal announced in October. The move is part of a drive by DONG to divest non-core assets.

There have been two more green bond issues, according to industry group the Climate Bonds Initiative. First is a SEK1.3bn issue from Swedish property company Vasakronan, with investors including names like AP3 and Nordea Investment Management. And Bank of America has raised $500m in what the initiative said is the first sale by a US bank issuer of green bonds. “Expect this to be a dam-breaker,” the initiative said, adding this is now a “fizzing market”.

Social

A new index has been launched to encourage investment in employee ownership companies in the UK. The UK Employee Ownership (EO) Index, launched by Business Minister Jo Swinson, will enable investors to easily identify the 69 UK public companies listed on the London Stock Exchange that have at least 3% of their issued share capital held by, or for, the benefit of employees other than main board The Index is being calculated by FTSE International. Link

The International Union for Conservation of Nature (IUCN) has released the first Environment and Gender Index which monitors gender equality and women’s empowerment in the environmental arena. It ranks 72 countries on how they are translating gender and environment mandates into national policy and planning.h6. Governance

The California Public Employees’ Retirement System (CalPERS), the $275bn (€204.3bn) US pension fund, says it is set to get back approximately $261m in damages from investment bank JPMorgan in a federal investigation settlement announced by California’s Attorney General Kamala Harris. The recovery, plus interest, seeks to make CalPERS whole on $221.6m in losses the CalPERS sustained on investments in mortgage-backed securities sold or underwritten by the bank. Henry Jones, Chair of CalPERS Investment Committee, said: “This helps bring closure and justice in this matter for those who were harmed and holds JPMorgan accountable for its actions.”

Smoothwater Capital, the new Canadian activist investment boutique headed by Stephen Griggs, the former Canadian pension fund chief and ex-Canadian Coalition for Good Governance head, is seeking to oust seven board members at Toronto-listed mortgage firm Equity Financial Holdings. According to a filing, Smoothwater is seeking to get Griggs and recently ousted former Equity Financial CEO Nick Kyprianou onto the board. Their other candidate is Glen Silvestri, former vice president at the Ontario Teachers’ Pension Plan’s private equity arm Teacher’s Private Capital.

The VBDO, the Dutch Association of Investors for Sustainable Development, has found that 86% of the boards of the 50 largest pension funds are male. “This low level of diversity within the pension fund boards raises questions such as whether the participants are properly represented and if enough attention is being paid to stimulating diversity in background, expertise and opinions in board discussions,” the VBDO said. It added that Dutch trustee boards should be more proactive and not just leave it to their asset managers. The VBDO’s seventh annual Benchmark Responsible Investment by Pension Funds in the Netherlands is available here

The CRO Forum, the body for Chief Risk Officers in the insurance industry, has released a new report on ESG and country risk management. Environmental, Social and Governance factors in Country Risk Management – a new horizon is the fourth in a series. The forum says: “It is hoped that the ideas set out in this publication will prompt risk professionals to include ESG country risk management in their toolkits as a matter of course.”

The Trades Union Congress, the UK’s umbrella union body, has slammed new figures showing median total earnings of FTSE 100 directors increased by 14% last year. TUC General Secretary Frances said: “Britain’s top bosses are back to their old tricks as their pay is growing 20 times faster than the average worker.” She added: “It’s one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter.”