RI ESG Briefing, November 6: World Bank green bonds reach $3.5bn

Environmental

Three new green bonds from the World Bank have taken the institution’s total to 52 transactions in 17 different currencies – for a total amount of almost $3.5bn (€2.7bn). The three new transactions were distributed to Japanese retail and institutional investors through Daiwa Securities as lead manager. There are now projects in 20 countries that are being supported by the bonds. Announcement

The National Association of Pension Funds has welcomed the UK government’s consultation on removing limits to local authority pension funds’ investment in infrastructure, saying it could remove a key barrier to the asset class. It comes as a new £2bn (€2.5bn) Pensions Infrastructure Platform is being created to facilitate pension fund investment in infrastructure, with founding investors including the West Midlands and Strathclyde pension funds.

Brookfield Renewable Energy Partners, the Toronto-listed renewable power firm, has completed a C$175m (€135.3m), 41-year private placement bond financing for its 45MW Kokish River hydroelectric project on Vancouver Island. The issue bears an interest rate of 4.45% and Scotia Capital was the placement agent. Brookfield has an installed capacity of 5,000MW in mostly hydroelectric projects.

Social

US finance giant Northern Trust is to use MSCI’s environmental, social, and governance (ESG) research, ratings, and screening tools to provide customisable ESG solutions to its institutional clients. “We are increasingly seeing growth in ESG portfolios as investors become more aware of ESG factors and their possible influence on a corporation’s financial profitability and brand reputation,” said Steve Potter, global head of asset management at Northern Trust. Clients will now be able to access 79 ESG indices; the pair are also working on custom ESG indices for passive institutional funds. Link

Christian Super, the A$450m (€366m), 18,000-member Australian superannuation fund, has joined the Investors’ Council of the Global Impact Investing Network (GIIN), the US-based not-for-profit organization. Other new members include $7bn alternatives fund manager the Abraaj Group, the UK’s Big Society Capital, the $3bn California Endowment, the $2.4bn Goldman Sachs Urban Investment Group and the World Bank’s International Finance Corporation.h6. Governance

Australian legal claims firm IMF Australia is reportedly investigating whether it is viable to take legal action in Europe on behalf of banks and pension funds following its success against rating agency Standard & Poor’s and Royal Bank of Scotland this week. The FT reported the firm has retained lawyers to investigate whether it would be appropriate to launch similar claims. An Australian court on Monday ruled that S&P misled 12 local councils by awarding a ‘AAA’ rating to a complex structured product called a constant proportion debt obligation (CPDO).

The Club of Florence, the Italian corporate governance institute, has teamed up with the School of Economics and Social Sciences of the University of Hamburg, Deutsche Bank, and proxy firm VIP for a second survey on corporate governance. “After having covered “Ethical Guidelines in the Asset Management Industry” in 2009, we now highlight the multiple possibilities of shareholder engagement and search out the use investors and companies make of it,” they said. The deadline for responses is December 15, and the results will be published early next year. Link

The Taiwan government’s giant labour and pension funds have won an agreement from Dutch financial conglomerate ING, which has agreed to pay $8.8m to compensate for investment losses allegedly tied to irregular trading activities, according to reports.

US pension fund, the $1.4bn (€1.08bn) Louisiana Municipal Police Employees’ Retirement System, has brought a lawsuit against US chocolate maker Hershey calling on the company to disclose records that might determine if it knew its suppliers in Ghana and Ivory Coast used child labour. “By producing chocolate at its Pennsylvania factory that is the product of child and forced labor in West Africa, Hershey has flouted domestic and foreign law and placed at risk its century old brand and reputation,” said the complaint, filed in the Court of Chancery in Delaware.
Separately, a group of pension funds, including the Louisiana Municipal Police Employees’ Retirement System (LAPERS), has filed suit against Green Mountain Coffee Roasters, accusing the coffee firm of misleading its investors about demand for its products, according to reports. The funds filed their complaint with a federal court in Vermont, where Green Mountain is based.