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RI ESG Briefing, November 18: Investors write to 70 US companies on LGBT policies

The round-up of environmental, social and governance news

Environmental

German private equity firm Aquila Capital, which last July took in €250m from APG to invest in hydropower, has made its inaugural investment for the Dutch pension investor in Norway. The fund it set up for APG has acquired a 33% stake in hydro operator Tinfos from ERAMET, a French mining and metallurgy firm. Financial details were not disclosed. Tinfos runs 11 plants providing 279GW of power annually. Aquila said the investment would enable Tinfos to build additional power plants and more than double its annual capacity by 2020. In July, APG, which looks after €369bn in pension assets, said it expected returns from its hydropower plants to be in the “high single digits.”

Första AP-fonden (AP1), the first Swedish pension fund, has committed SEK444m (€48m) in Southern Pastures, the largest institutional farmland fund in New Zealand, according to a report in IPE.com. It quoted AP1’s head of communication and ESG, Ossian Ekdahl, as saying the aim is for the investments to provide a “long-term stable and secure return”. Southern Pastures was launched in 2012 with AP1 among the initial limited partners.

SunEdison, the New York-listed solar energy development firm, has teamed up with Nasdaq-listed renewable energy group TerraForm Power, its power-plant holding company, to acquire US wind energy development and asset management firm First Wind for $2.4bn. SunEdison said the move makes it the “leading renewable power plant developer in the world”.

The Board of Trustees of the American University in Washington is set to vote on whether to divest the private university’s $500m endowment from fossil fuels. The board votes on November 21 and it follows two years of campaigning and engaging with students, faculty, and staff, from the Fossil Free AU campaign.

Social

Investors with a total of £940bn (€1.17trn) in assets under management are backing the UK government’s recent commitment to include proportionate supply chain reporting requirements in the Modern Slavery Bill. More than 20 asset managers have already added their support for the inclusion of Transparency in Supply Chains (TISC) legislation within the bill. The include: Rathbone Investment Management; Hermes; Aviva Investors; Alliance Trust; BNP Paribas; CCLA; Church Commissioners; Henderson Global Investors; Royal London Asset Management; WHEB; The Pensions Trust; The Joseph Rowntree Charitable Trust; Barrow Cadbury Trust; Boston Common; Calvert Investments; Christian Brothers Investment Services; CBF Church of England Funds; Church Commissioners; Church of England Pensions Board; Ecclesiastical IM; Newton IM; Worcester Diocesan Investment and Glebe Committee.

The European Long-Term Investors Association (ELTI), the group of development institutions formed last year, has called for greater cooperation between Europe’s long-term financing institutions to reinforce support for “infrastructure, innovation and SME investment” which ELTI says is needed for economic recovery, sustainable growth and job creation across the EU. It comes after the body had its General Assembly in Prague this week, hosted by the Czech-Moravian Guarantee and Development Bank (CMZRB). ELTI, headed by European Investment Bank President Werner Hoyer, admitted the Nordic Investment Bank (NIB) and the Belgian SFPIFPIM as new members.h6. Governance

A group of US investors, with combined assets of $210bn, has written to around 70 of the country’s largest listed firms urging them to extend their lesbian, gay, bisexual, and transgender (LGBT) nondiscrimination policies and equal benefits policies abroad. The investors expressed concern about what they termed “highly varied and often harsh” legal and cultural environments faced by LGBT communities in many parts of the globe, and the related risks posed to companies that operate in these environments. Signatories of the letter: Arcus Foundation; Arjuna Capital; Calvert Investments; Clean Yield Asset Management; First Affirmative Financial Network; Goodfunds Wealth Management; Harrington Investments; Horizons Sustainable Financial Services; Jantz Management; Krull & Co.; Miller/Howard Investments; NorthStar Asset Management; the Office of the Comptroller of New York State; Pax World Management; Pride Foundation of Seattle, Washington; the Sustainability Group of Loring, Wolcott & Coolidge; Trillium Asset Management; Unitarian Universalist Association; Walden Asset Management; and Zevin Asset Management.

The Swedish Corporate Governance Board, the self-regulatory body, says a number of gender balance rule changes will come into force on January 1 2015 for listed companies. One key change is that shareholder-led nomination committees will have to report to the AGM on how it they have worked for gender balance on the board, making it an agenda item for shareholders’ meetings. “It is our assumption that shareholders with ambitious gender equality policies will welcome these rule changes, and that shareholders and companies will take the new rules extremely seriously. This is a shared responsibility to show that self-regulation is an effective system,” said Governance Board Chairman Arne Karlsson.

A new Canadian stock exchange backed by the Ontario Municipal Employees Retirement System (OMERS) has received regulatory approval. The Ontario Securities Commission has approved the Aequitas NEO platform that is planned by the Aequitas Innovations consortium, of which OMERS is a member alongside a range of other players. It’s hoped the new exchange will “address the pressing market issues of fairness, liquidity and transparency impacting investor confidence”. Aequitas plans to launch its trading platform and its listing platform during the first half of 2015. The private markets platform will then follow, subject to regulatory approval. Announcement

The New Zealand Financial Markets Authority (FMA) has published a revised version of its handbook on corporate governance for consultation. The newly revised Draft Principles and Guidelines Corporate Governance in New Zealand is available for feedback until December 1. The FMA says the updated handbook, first produced in 2004, helps to bring more focus on how good corporate governance and board behavior supports the principles underpinning the Financial Markets Conduct Act, which takes full effect from 1 December.

It’s been reported that Erwin Müller, the German retail magnate who is suing Swiss bank J. Safra Sarasin over a failed so-called “cum-ex” investment, may have been aware of the risks of the investment. According to Juve, a German legal portal, Müller’s lawyer informed him in March 2010 that the investments involved a legal loophole in the taxation of dividends. Müller’s lawsuit, in which he is seeking €47m in damages, is based on his insistence that the bank did not adequately inform him of the risks beforehand.