RI ESG Briefing, November 27: GMI Ratings issues latest Black Swan Risk List

The round-up of environmental, social and governance news


The Pension Insurance Corporation, the £6bn (€7.4bn) defined benefit pensions insurance provider, has completed the first ever UK publicly listed solar finance bond, investing £40m as the sole buyer in a bond from solar photovoltaic firm Solar Power Generation Ltd (SPGL), which matures in 2036. The bond is linked to two 5MW plants in Somerset in the west of England. “The bond will provide a good match for PIC’s pension liabilities, with a highly predictable, inflation-linked cashflow from a regulated entity, stretching for 24 years,” PIC said.

Swedish national buffer fund Sjätte AP-fonden (AP6) is planning to transfer its SEK36.2m (€4.2m) stake in wind power technology firm Vertical Wind to other shareholders, according to reports. The fund will also sell its stake in alternative energy firm Electric Generation AB.

A new report from the Association of Chartered Certified Accountants (ACCA), KPMG and campaign group Fauna & Flora International explores the preparedness of the accounting profession to respond to declining natural capital. The report is called “Is natural capital a material issue? An evaluation of the relevance of biodiversity and ecosystem services to accountancy professionals and the private sector” and it is available via this link


Ethix SRI Advisors, the environmental, social and governance (ESG) research firm, has launched a new norms-based tool for ESG screening of large fund platforms called Ethix Fund Screening. Each fund on a fund platform will be marked with a symbol showing whether a fund has shares in companies which are assessed as being involved in verified breaches of international norms for the environment, human rights, labour rights or corruption.

Social investor Bridges Ventures and the new Big Society Capital are lead investors in a new £3.1m Social Impact Bond in the UK. The new bond, commissioned by Essex County Council in eastern England and developed by Social Finance, will fund a five-year programme to help 380 vulnerable young people. Big Society Capital Chief Executive Nick O’Donohoe called it a “major breakthrough” showing the potential of social investment market. “We hope that Essex will pave the way for other local authorities to follow.”h6. Governance

GMI Ratings, the environmental, social, governance (ESG) researcher, has released its second “Black Swan Risk List”, identifying 40 North American companies with the highest risk of major drops in share prices within the next six months. Investors can use the list to “gauge their portfolio exposure to issuers with the most aggressive accounting practices” GMI said, adding the list was released just as one of the companies listed, Hewlett-Packard, disclosed an $8.8bn write-down.

There’s a wide variety in institutional investors’ voting at company annual general meetings, according to a report by the Trades Union Congress, the union umbrella group, cited in the Financial Times. “When it comes to voting and engagement, it makes a huge difference who you invest with. Clients should engage with their fund manager to ensure they are happy with the approach taken,” TUC General Secretary Brendan Barber was quoted saying.

There’s a call for papers for the 4th International Conference on Corporate Governance in Emerging Markets, which take place at the Indian School of Business in Hyderabad on August 23-24. “The conference particularly invites papers focusing on comparative research comprising clusters of countries sharing similar institutional or macroeconomic characteristics.” The deadline for submitting papers is February 28, 2013 and accepted papers will be announced by April 30. Link

The Toronto Globe and Mail has published Board Games 2012, its annual report on corporate governance at Canadian companies. The report covers the progress of women on boards, and ranks them on governance issues, according to board composition, shareholding and compensation, shareholder rights and disclosure.

The National Association of Pension Funds, the UK body, has published a guide to help pension fund managers and trustees understand securities class actions. Securities Class Actions made simple offers a clear and simple introduction to securities class action litigation, the NAPF said. The hard copy guide costs £18 for NAPF members and £35 for non-members.