RI ESG Briefing, Nov. 5: ABP settles with Credit Suisse and Morgan Stanley

Environmental

Green bonds are emerging as a “frontrunner” to fund environmental investment according to Canada’s TD Economics in a report. “Green bonds are like victory bonds for the environment,” said Craig Alexander, Chief Economist at TD Bank. It follows the recent green bond announcement from the Ontario government. The report is called Green Bonds: Victory Bonds for the Environment and it’s available here.

Carbon taxes and emission trading systems are the most cost-effective means of reducing CO2 emissions, according to the Organisation for Economic Cooperation and Development (OECD). In a new study, the body says that they should be at the centre of government efforts to tackle climate change. Effective Carbon Prices shows that taxes and trading systems are preferable to other policies, such as feed-in tariffs, subsidies and other regulatory instruments. OECD Secretary General Angel Gurría said: “There has been a huge amount of taxing and regulating around carbon, with prices established too high or too low, and the outcome has been far from optimal. This is a chaotic landscape that sends no clear signal, and must be addressed.”

The Inter-American Development Bank has approved a loan for up to $132.6m to partially finance the construction of the Carapé I and II wind farms in Uruguay. The financing includes $88.4m from the Bank’s ordinary capital and $44.2m from the China Co-financing Fund for Latin America and the Caribbean, which was established by the Chinese government to co-finance IDB projects in the region.

Social

Triodos Investment Management has sold most of its 13.5% stake in TenGer Financial Group, the holding company of Mongolia’s XacBank, to new investors including Japan’s ORIX and the World Bank’s IFC. Through its funds Triodos-Doen and Triodos Fair Share Fund, Triodos had been a shareholder with a board role since 2004. It said XacBank has now achieved a “level of maturity” in terms of its “outreach, governance, risk management and performance.”

The Islamic Development Bank (IDB) will set up a $10bn Sukuk [Islamic bond] issuance programme on the Nasdaq Dubai exchange, according to a Reuters report. It added it would be the bank’s third Sukuk programme – it already issues Islamic bonds in the UK and Malaysia – and its first in a Middle Eastern country.h6. Governance

Dutch civil service pension fund ABP says it has settled its mortgage-backed securities lawsuits with Credit Suisse and Morgan Stanley. ABP, which has assets of €292bn, had contended they had provided false and misleading information when selling the investments. It means that all ABP’s outstanding cases against investment banks over the financial crisis are now settled. ABP said it was satisfied with the settlement, though the amount won’t be disclosed.

Massachusetts pension fund the Haverhill Retirement System has sued seven major banks over allegations they conspired to manipulate rates used for determining foreign exchange prices, according to reports. The fund filed a class action complaint in a Manhattan federal court accusing the banks – Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, Royal Bank of Scotland and UBS AG – of violating US antitrust laws.

SNS REAAL, the Dutch insurance and banking institution which no longer has a stock exchange listing after being nationalized in February, has decided to stop publishing quarterly results. It said: “SNS REAAL changes its policy because it focuses on long-term value creation. Thus, from 2014, SNS REAAL NV will publish its financial results twice a year, i.e. the annual report and the interim report.”

New York State Comptroller Thomas DiNapoli has announced an agreement with TD Ameritrade under which the online brokerage will amend its equal employment opportunity policy to explicitly prohibit discrimination based on sexual orientation or gender identity nationwide. Since 2010, DiNapoli has reached agreements with more than 30 companies to implement such policies. The $160.7bn New York State Common Retirement Fund which DiNapoli oversees has a stake worth $14.7m in TD Ameritrade.

A new study has found that corporate sustainability disclosure practices vary significantly across regions, with European companies leading but emerging markets-based companies quickly closing the “disclosure gap.” The findings come in Corporate Knights Capital’s second report on the state of corporate sustainability reporting across the world’s stock exchanges. The study – Trends in Sustainability Disclosure: Benchmarking the World’s Stock Exchanges, 2013 – was prepared with financial support from Aviva Investors and Standard & Poor’s.