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RI ESG Briefing, Oct. 15: Norges Bank, Bill Gates, ICCR, ‘Positive Impact Manifesto’, FBI

The round-up of the latest ESG developments

Environmental

Norges Bank Investment Management Chief Executive Yngve Slyngstad has backed up Bank of England Governor Mark Carney’s warnings about the impact of climate change on the financial system. “The important issue raised there is that, yes, all investors have started to price into the market the issue of stranded assets and pricing of oil companies,” Slyngstad was quoted
as saying in an interview by Bloomberg. The media giant said Carney is the most prominent figure yet from the financial world to express concern about how climate-related issues could hit markets.

Bill Gates, the billionaire tech mogul turned philanthropist, has come out against fossil fuel divestment per se and says there is no certainty about global warming. In an interview with Atlantic magazine, Gates said divestment advocates are misguided if they believe it alone will make a difference. “I worry you’re taking whatever desire people have to solve this problem and kind of using up their idealism and energy on something that won’t emit less carbon,” he said. “So broaden your message to be pro–R&D. And even the same people who are divesting those stocks of energy companies, ideally some of that money would come into this pool that is funding these high-risk innovations.” On global warming, he said: “The heating levels have not tracked the climate models exactly.” Link

Impax Asset Management, the environmental investment specialist, says one of the funds it manages has signed an agreement for the sale of a portfolio of wind assets in France and Germany to ERG Renew, the renewable energy subsidiary of Italy’s ERG Group. It’s part of Impax’s planned realisation of the operating assets in accordance with its fund’s strategy. The deal includes eleven wind farms in France, with an installed capacity of 124MW, and six in Germany, with an installed capacity of 82MW.

Social

The Interfaith Center on Corporate Responsibility (ICCR), the US faith investment body, says it will in the coming months be expanding its campaign to protect children’s privacy on the internet and social media channels, a right established by the UN Convention on the Rights of the Child. It says Facebook has responded to pressure from shareholders and groups like the Center for Digital Democracy by offering assurances that it won’t act on publicly reported plans to open its service to children under 13. And a coalition of 13 ICCR members is also pressing Google over the company’s new ad-supported YouTube Kids’ app, which features program-length commercials for products by fast food and candy companies. The news comes in the ICCR’s new annual report for 2014-15.

Dutch pension funds have turned into mortgage lenders, according to the Financial Times. The FT said if you need a mortgage in the Netherlands, you might well be borrowing from a private fund (‘regiepartijen’), acting on behalf of institutional investors, that is prepared to lend for 25 years. It said the funds have a 10% market share, according to consulting firm IG&H.h6. Governance

A group of 10 banks, comprised of BMCE Bank, ING Bank, Nedbank, Piraeus Bank, Société Générale, SEB, Standard Bank, Triodos Bank, Westpac and YES Bank have issued what’s called the ‘Positive Impact Manifesto’. It seeks an impact-based approach to banking, offering a “bold and innovative vision” of the banking sector’s role in achieving sustainable development. The banks, members of the UNEP Finance Initiative, collectively hold in excess of $4trn in financial assets. The initiative was launched at UNEP FI’s 2015 Annual General Meeting.

The Federal Bureau of Investigation (FBI) is very much alert to US’s Foreign Corrupt Practices Act, according to reports. A session at the recent ThomsonReuters Governance and Risk Seminar featured an FBI representative, who was asked if issues such as conflict minerals, human rights abuses and human trafficking were on its radar screen. And it emerged that the bureau has identified linkages between FCPA violations/concerns and that human rights matters are of interest to them, according to consulting group Elm Sustainability Partners. It added that the FBI has “unlimited global reach” for FCPA compliance enforcement. “We don’t know what that all means just yet, but we do think it adds another dimension of risk to the SEC filings, compliance status and supplier relationships,” says Elm.

Just about one in five institutional investors (20.6%) say they use the proxy voting policy of an advisory service provider like ISS or Glass Lewis or ISS, according to the results of research firm Proxy Insight latest survey of just over 1,000 investors. The results also reveal that 71% vote their proxies based on their own corporate voting policies while a further 8.5% delegate voting decisions to a sub-manager or another asset manager.

Asset management firm Columbia Threadneedle Investments has revealed the gender diversity at the firm as part of an attempt to address the low numbers of women in the sector, according to FundWeb. As at the end of June, fund managers at the EMEA operations of the asset manager shows 28% of investment professionals are women – down from 29% at the end of last year. Just 19% of senior management are women. The board is 22% female. The firm will now include gender diversity information in its annual reports.

BHP Billiton director Carolyn Hewson has reportedly urged the Australian parliament to adopt hard targets for gender diversity on government boards. “There are no longer any valid excuses,” she was quoted as telling a parliamentary inquiry by the Australian Financial Review. She added there were “so many capable, experienced and well qualified women” to comprise at least 40% of the country’s decision-making capacity. The report added she was speaking in support of proposals for 40% per cent of roles on government boards to be filled by females.