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RI ESG Briefing, November 9: Canada’s La Caisse making direct loans to renewables firms

Round-up of the latest ESG developments.

Environmental

Canada’s La Caisse de dépôt et placement du Québec has loaned $40m to US renewables firm Sunrun, to finance a rooftop solar portfolio. The deal is part of a wider $235m credit facility closed by Sunrun last month. It is CDPQ’s first direct loan in the residential solar space, although it has made other direct loans in renewables in North America and India. The pension scheme also recently provided a C$150m loan to Canadian renewables firm Innergex at the same time as it acquired fellow renewables company Alterra Power.

Investments in clean energy in non-OECD countries has slowed due to lack financing from OECD countries and limited policy-making follow-through in non-OECD nations, according to research firm Bloomberg New Energy Finance. Clean energy investment in non-OECD countries reportedly fell by $40.2bn to $111.4bn in 2016 from $151.6bn in 2015.

Northern European nations dominate the 6th edition of the Global Sustainable Competitiveness Index (GSCI), with the top 5 spots taken by the Scandinavian nations, topped by Sweden. The index – created by SolAbility, the Korea-based sustainability consultancy – ranks countries’ sustainability credentials based on 111 quantitative performance indicators. Of the largest economies, Germany is ranked 14th, Japan 20th, the UK 22st, the US 29th, and China 32nd.

Generation Investment Management, Al Gore’s sustainability boutique, has published its Sustainability Trends Report for 2017, covering sustainable business innovations in the areas of Mobility, Energy, Built Environment, Food Systems, and Wellbeing.

Social

Social Finance, the global network of impact investment organisations, with offices in UK, US and Israel, is launching in India over the coming months. Social Finance celebrated its 10th anniversary in London this month, where the move into India was announced. Speaking at the event, David Blood, chair of Social Finance, said: “The achievements of Social Finance in its first ten years are significant. It has challenged the status quo, made a major contribution to the global impact investment market and incubated new models of change to tackle important social issues.”

The Calvert Foundation has rebranded as Calvert Impact Capital. In a document outlining the move, it says: “to reflect our role in the impact capital markets and position our business more accurately, we made the strategic decision to rename. The “Foundation” in our name was consistently misleading. We believe that Calvert Impact Capital better represents who we are and what we hope to accomplish going forward”. Calvert Impact Capital’s Strategic Plan 2017-2019 includes strengthening and growing its existing business and seeking new ways to expand the impact investing industry overall.

Equatorial Palm Oil, the AIM-listed palm oil development and production company with operations in Liberia, has published its inaugural human rights report. Executive Director, Geoffrey Brown said EPO is committed to respecting internationally recognised human rights throughout its operations that it uses the UN Guiding Principles “to help us assess and strengthen the relevant policies and processes to put in place”.

US hospitality giant Marriott has reportedly launched a new sustainability and social impact platform inspired by the UN Sustainable Development Goals. As part of its Serve 360: Doing Good in Every Direction, the hotelier will set a number of 2025 commitments, including reducing water by 15%, carbon by 30%, waste by 45% and food waste by 50%.h6. Governance

Denmark’s third-largest pension Sampension has reportedly said that will focus more on corporate tax transparency as part of its overall investment strategy. Tax News cited the fund as saying tax transparency will be one of the criteria used by fund managers when applying its responsible investment policy.

The Global Unions Committee on Workers’ Capital (CWC), the body that educates union pension trustees from 26 countries on responsible investment, is preparing to launch “a global initiative on asset management fee transparency”, the FT reports . Hugues Létourneau, Senior Programme Officer at the CWC, is quoted saying that the fee initiative is likely to be one of the CWC’s priorities in 2018. According to a recent study by the American Federation of Teachers excessive fees paid to alternative investment managers are a significant contributor to funding shortfalls in retirement pots.

Spanish insurance giant Mapfre has taken a 25% stake in French ESG investment boutique, La Financière Responsable (LFR), as the two firms announce a “strategic partnership”. LFR managed funds and new ESG products will now be offered through Mapfre’s Luxembourg platform or directly to institutional and high net worth investors looking for ESG options.

European investors have increased their opposition to excessive executive pay and bonuses at annual general meetings this year, Reuters reports. The news agency cited a report by proxy voting consultant Georgeson showing that the number of remuneration proposals that prompted opposition from at least 10% of voting shareholders rose in Germany, Switzerland, the Netherlands, Italy, Spain, and France. The biggest increase was in France, where opposition was up 205% on 2016, while Britain showed a 28% decline.

Index and research provider MSCI Inc. has delayed its decision on whether to bar companies offering dual shares from its benchmarks, Bloomberg reports. MSCI, whose indexes guide the investment of about $11tn in assets, has been reviewing what to do about companies – such as Snap Inc., the creator of the Snapchat app – that deprive public shareholders of voting rights since June. The company has also, reportedly, announced that it has broadened its investigation to consider “a discussion on the treatment of all types of unequal voting structures”.

Swiss lender Credit Suisse, French banking group BNP Paribas, and Russian bank VTB Group are being investigated by US authorities over their roles in selling $2bn of debt for Mozambique, the WSJ reports. The US Justice Department and FBI are exploring whether the banks facilitated corruption by enabling Mozambican officials to take money raised in the debt sales. Last year, it was also revealed that Credit Suisse was one of three banks being scrutinised by US, UK, and Swiss authorities over the ‘tuna bonds’ scandal in Mozambique.

The UK’s Investment Association, whose members manage almost £7tn in asset, has published its 2018 Principles of Remuneration in an open letter to the Chairs of Remuneration Committees of FTSE 350 companies. The Principles, which have been published for over 40 years, serve as an annual guide for best pay practice at listed companies. This year’s Principles come at the end of an AGM season in which corporate pay came under particular scrutiny

The Qatar Stock Exchange (QSE) is reportedly launching a sustainability dashboard that will allow listed companies to digitally report their sustainability performance in line with 33 indicators outlined in the QSE Guidance on ESG reporting. It is set to launch in December.