RI ESG Briefing, October 1: Sweden’s AP2 backs Nordic Investment Bank enviro bond

Environmental

Swedish state fund AP2, Andra AP-fonden, the SEK241.5bn (€27.9bn) investor, was among participants in a Nordic Investment Bank (NIB) Environmental Bond to finance a hydropower project in Norway on September 20, the NIB’ss first Swedish krona-denominated environmental bond of 2013. The SEK500m issue will be used to finance the Norwegian hydropower company Agder Energi’s construction of the new Iveland II hydropower plant. Sole Lead Manager for the transaction was Handelsbanken Capital Markets. AP2, SEB Asset Management, SBAB Treasury, Länsförsäkringar Västernorrland and Kalmarläns pensionförvaltning participated in the transaction. Announcement

The UK Green Investment Bank has invested £11m (€13.2m) for a minority stake in waste-wood-to-energy project in Wales. Western Bio-Energy will use the money from a GIB fund managed by Greensphere Capital to refurbish its five-year-old 14.7MW plant in Port Talbot.

The Caisse de dépôt et placement du Québec, the C$176.2bn (€126.3bn) Canadian investment giant, now has a stake of 14.38% in water treatment firm H2O Innovation following a private placement. The Caisse said H2O is a “growing Québec company that designs, manufactures and assembles custom-built water treatment systems throughout North America”.

Social

The Access to Medicine Foundation has selected environmental, social and governance (ESG) research firm Sustainalytics as its research partner for the 2014 Access to Medicine Index following a competitive tender process. “We are sure that Sustainalytics’ expertise and work philosophy, combined with access to its team of knowledgeable analysts will make for a great partnership,” says Ed Monchen, chief operating officer of the Access to Medicine Foundation. The index, launched in 2008 with funding from the Gates Foundation, and the UK and Dutch governments, ranks pharmaceutical companies’ efforts to improve access to medicine in developing countries.

The Electronic Industry Citizenship Coalition (EICC), a group of 89 leading global electronics companies working on social, ethical and environmental responsibility in the global supply chain, has released its fifth annual report. The year saw the EICC appoint its first executive director, Robert Lederer and the progress on several topics including working hours, conflict minerals, transparency, the UN Guiding Principles on Business & Human Rights and carbon and water use in operations.h6. Governance

What the UK government has called “sweeping reforms” to directors’ pay and narrative reports have come in to force. As of today (October 1) shareholders will have access to clearer information on the pay of top executives and will be able to exercise their new legally binding vote on executive pay. In addition, changes to simplify and strengthen companies’ non-financial reports will also come into force. Reporting will include additional information on human rights issues, the gender of the board and senior management and disclosures on greenhouse gas emissions. Link
Eurosif, the European Social Investment Forum, has released a new report on stewardship and found that engagement on ESG issues is growing – as its potential to deliver long-term value becomes apparent. The report, called Shareholder Stewardship: European ESG Engagement Practice 2013, was unveiled at the forum’s European SRI Symposium last month. It describes in detail five distinct phases of ESG Engagement and provides numerous practical examples from European asset owners and asset managers of their experiences engaging with companies. Link

The Malaysian stock exchange, Bursa Malaysia, has launched the second edition of its Corporate Governance Guide. It reflects the principles and recommendations of the Malaysian Code on Corporate Governance 2012 and changes to listing requirements. Link to guide

A new poll by German asset manager Union Investment shows that 87% of German retail investors want asset managers and insurers to address abuses at listed firms. The poll of 500 investors also found that 58% believe that the managers of those companies were more interested in their personal benefit than that of the firm. “The managers of those firms had better see the writing on the wall. We will in any event continue to advocate strong corporate governance,” said Michael Schmidt, Union’s head of equities. Meanwhile, the poll showed that 79% of respondents back regulation to improve corporate governance.

A new report from IFC and the World Bank finds that stock exchanges’ corporate governance indices can raise a country’s overall corporate governance standards and offer companies possible financial and investment benefits. Raising the Bar on Corporate Governance: A Study of Eight Stock Exchange Indices provides a comprehensive analysis of these indices, which could help enhance legal and regulatory frameworks by extending governance criteria to develop objectives and measurable benchmarks.