RI ESG Briefing, Oct. 9: NAPF and ISS end UK corporate governance deal

Environmental

Leading fund managers Aviva Investors and BlackRock have both announced separate transitions to acquire solar energy infrastructure. Aviva – which has £245bn (€288.7bn) in assets under management – said it would buy an 8.6MW portfolio of residential solar photovoltaic systems installed on over 3,000 properties across the UK from clean energy outfit Zouk’s first infrastructure fund, Zouk Solar Opportunities. And, it’s been announced that a BlackRock fund has bought two “utility-scale” solar power plants in Ontario, totaling 20MW, from Nasdaq-listed solar module provider Canadian Solar.

The European Bank for Reconstruction and Development (EBRD) is providing a long-term loan of up to PLN292m (€69.5m) to a group of three special-purpose companies fully owned by listed renewables firm Polish Energy Partners S.A. (PEPSA) for the construction of a portfolio of three wind farms in Poland. They will have a total capacity of 103.5MW.

Brazilian development institution BNDES has approved a BLR603.9m (€202.6m) loan for the 258MW Geribatu wind project of state energy company Electrosul Central Electric and private equity fund Rio Bravo. Link

Social

A new ethical retail banking chain is in the offing in the UK following the successful £600m bid for 314 RBS branches by a group including the Church Commissioners. The Commissioners’ Director of Investments Tom Joy was quoted by Civil Society as saying it will be a “good bank” operating to the highest ethical standards. “It’s going to be banking like it used to be,” he was quoted saying.

Consulting group Watershed Capital Group says it is planning future impact and sustainable investing ‘trade missions’ following the success of its trip to Europe recently. Organised with the US Department of Commerce, the first US/European Impact & Sustainable Private Equity Certified Trade Mission saw 10 US-based managers meet with more than 100 European limited partners in Zurich, Amsterdam, and London. It said: “Based on the success of this trade mission, Watershed Capital Group is planning future trade missions.”h6. Governance

The National Association of Pension Funds (NAPF), the UK trade body, and governance research firm Institutional Shareholder Services (ISS) have announced that their joint licensing agreement on UK corporate governance services – that dates back to 2006 – will not be extended when the present arrangements expire on June 29 next year. Until then, the pair say they will continue to work together, “although each organisation will conduct its company engagement separately”. From July 2014, ISS will no longer use the RREV brand in the UK denoting the former NAPF/ISS partnership.

Institutional Shareholder Services says it received more than 500 responses to its annual feedback survey on emerging corporate governance issues. This year’s survey was conducted from July 31-September 13. “This year, the survey was designed to encourage global market participants to provide regional input on corporate governance issues that are pertinent to all capital markets worldwide,” ISS said. It had responses from 128 institutional investors and 350 corporate issuers. Over 90% of the issuers were based in the US, compared to 66% of the investors.

Wells Fargo has been ranked lowest among a group of seven of its US bank peers on human slavery issues, according to a report by the Interfaith Center on Corporate Responsibility quoted by the Christian Post. Investment bank Goldman Sachs received the most favorable score, the paper said, citing the new “Breaking the Bonds: Modern Day Strategies to Counter Modern Day Slavery” publication.

CtW Investment Group, the US investment advisor linked to labor unions, has written to shareholders in software giant Oracle urging them to vote against executive pay packages for executives and withhold support for the company’s board’s compensation committee. CtW said Chief Executive Larry Ellison and his colleagues are overpaid compared to their peers, Bloomberg News reported.

South Africa: A new report has suggested that few institutional investors are implementing the Code for Responsible Investing in South Africa (CRISA), according to a report in domestic newspaper Independent Online. The paper cited a report commissioned by the CRISA committee suggesting institutions aren’t taking environmental, social and governance (ESG) issues seriously and are generally not applying the Code’s principles.