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RI ESG Briefing, Oct. 15: Ruggie’s Shift group responds to nonfinancial reporting proposals

The round-up of environmental, social and governance news

Environmental

The UK Green Investment Bank has announced a £58.6m (€69.3m) investment in the world’s largest offshore wind farm, the 630MW London Array. The investment will refinance a significant portion of Abu Dhabi investor Masdar’s 20% equity stake in the project. GIB’s senior debt commitment is being made alongside co-lenders Bank of Tokyo-Mitsubishi UFJ, KfW IPEX-Bank, Siemens Bank and Sumitomo Mitsui Banking Corporation. The capital released will be reinvested into the UK offshore wind sector by Masdar. The total investment is £266m.

KGAL, the €25.1bn German investment group owned by Commerzbank, BayernLB and Sal. Oppenheim, has bought the 12MW Dargies wind farm in Picardie, France – set to be commissioned in July 2014 – from developer WKN AG. It follows KGAL’s acquisition of the Hollige facility from WKN earlier this year.

The French Constitutional Court has validated a government moratorium on shale gas fracking in the country, which had been challenged by a group of oil and gas companies. The decision taken on October 11 was hailed by French President, Francois Hollande, who said that the law against fracking for shale gas was now incontestable in France.

US law firm Robbins Geller Rudman & Dowd says it has been appointed lead counsel for an investor class action against US solar panel firm First Solar. It added that Judge David Campbell rejected defendants’ arguments that First Solar securities traded on an inefficient market and found that the fraud on the market theory was applicable to the class.

Social

The New Zealand Superannuation Fund, the NZ$23bn (€14.3bn) state fund with a strong responsible investment framework, has appointed Northern Trust’s asset management arm to manage four new passive global equities mandates tracking global large cap, global small cap, developed emerging markets and developed real estate investment trust (REITs) indices.
US-based investment firm Sonen Capital has published a report detailing the financial performance of its client the KL Felicitas Foundation’s investment portfolio. Evolution of an Impact Portfolio: From Implementation to Results “demonstrates to investors that impact investments can compete with, and at times outperform, traditional asset class strategies while pursuing meaningful and measurable social and environmental results” San Francisco-based Sonen said.

Sustainability ratings of sovereign nations can help investors avoid countries that are likely to default on their debts, a new study from German ESG firm Oekom claims. It found that investors that had shunned Greek debt on account of Oekom’s negative ratings of the country – it has not been ranked ‘prime’ since 2005 – were not affected by the so-called “haircut” of March 2012. “The study shows that the inclusion of sustainability ratings of countries for the purpose of gauging risk is beneficial to long-term oriented investors,” said Andreas Hoepner, Professor at the Henley Business School in the UK, who led the study.h6. Governance

Shift, the non-profit centre for business and human rights that’s headed up by UN Guiding Principles on Business and Human Rights author Professor John Ruggie, has proposed a series of amendments to the European Commission’s nonfinancial reporting proposals. The Commission adopted the plan in April 2013 and Shift’s amendments to it are available here. Ruggie is Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government and Shift was set up in 2011 to help governments, businesses and their stakeholders put the UN Guiding Principles into practice.

The British Columbia Investment Management Corporation, the C$98.7bn (€70.6bn) Canadian pension giant, and US fund firm Christian Brothers Investment Services will present a shareholder proposal calling for the appointment of an independent board chair at Twenty-First Century Fox. The resolution, also supported by the UK’s Local Authority Pension Fund Forum, will be presented at the media group’s annual shareholder meeting on October 18 in Los Angeles. Advisory firms Institutional Shareholder Services, Glass Lewis, PIRC and GMI have all recommended voting for the proposal.

US and global food groups are facing shareholder resolutions on genetically modified food labelling from investor groups As You Sow and Green Century Equity Fund. The former has filed resolutions at Monsanto, DuPont and Dow Chemical and intends to file a shareholder resolution at General Mills and Abbott Laboratories. Green Century plans to file at Kraft Foods Group, while partner the Environmental Working Group plans to file at Coca-Cola and PepsiCo. At issue is donations the companies are said to have made to oppose ballot initiatives to require the labeling of products containing genetically modified organisms (GMOs). Link

Governance research firm PIRC has teamed up with investment skill measurement firm Inalytics on a new service for pension funds. Inalytics has incorporated PIRC’s Corporate Governance Ratings for quoted companies in the UK, the US and Europe – bringing together benchmarking of investment skills with analysis of the governance risk carried in equity portfolios.

MSCI ESG Research has launched MSCI ESG DataMetrics, a set of environmental, social and governance (ESG) scores, indicators and data. It says it will “facilitate quantitative analysis, development of proprietary ESG models and reporting on ESG and portfolio footprint analysis”. The new offering provides 174 metrics on eight ESG issues for all companies on the MSCI World Index, such as Carbon Emissions, Water Stress, Labour Management, and Corporate Governance.

Listed US firms are more concerned about the cost and effort of complying with the Securities and Exchange Commission’s proposed CEO pay ratio disclosure rule than they are about how shareholders might react, according to a poll by consultants Towers Watson. The poll also found that only one in 10 employers believes the CEO pay ratio disclosure will provide important information for investors and companies.