RI ESG Briefing, October 1: Date set for first meeting of new UK Investor Forum

The round-up of environmental, social and governance news


Oil major Exxon Mobil has acknowledged the environmental risks of hydraulic fracturing (“fracking”) in a new report that follows pressure from advocacy group As You Sow and others. Fracking, Exxon said, was not “without risks” – although As You Sow President Danielle Fugere was quoted as saying by the Associated Press that the report lacks concrete data.

National Bank Financial and Sun Life Assurance of Canada have underwritten the Tretheway Creek run-of-river hydroelectric project in British Columbia that is being developed by Quebec-based Innergex Renewable Energy. Innergex said it had closed a C$92.9m (€65.8m) non-recourse construction and term project financing for project.

Deutsche Bank, one of the founding members of the Green Bond Principles, has warned that calls for standards and requirements on the green bond market are “premature and risk choking an embryonic market”. Its group sustainability officer Sabine Miltner said: “Despite impressive growth this year, focus should be on expanding issuance and investor interest. Over-burdening the market with green standards is counterproductive at this stage.” Miltner says verification that bonds meet the green bonds principle is important to ensure market integrity.

GE Energy Financial Services, a division of General Electric, has taken a 60% stake in Japan’s largest solar power project, which has also been backed by Kuni Umi Asset Management and Toyo Engineering Corporation. GE’s stake is one of the largest single equity investments in renewable energy in Japan. Financial details were not disclosed. To support the $1.1bn project, the three owners have raised more debt than any prior renewable energy project in the country: an $867m loan – led by Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Bank Corporation.


France’s ERAFP has been awarded the seventh annual ‘Responsible Investor Award’ by consulting firm Amadeis and Natixis Asset Management’s RI arm Mirova in conjunction with Les Echos and LHForum. The prize aims to reward institutional investors who have shown themselves as responsible investors through their actions in the last 12 months. The jury, chaired by former European Bank for Reconstruction and Development (EBRD) President Jacques Attali, comprised ‘top names’ in the Socially Responsible Investment (SRI) and sustainable development fields. ERAFP (Etablissement de Retraite Additionnelle de la Fonction Publique) is the more than €20bn French public service additional pension scheme. Announcement

Swedish state pension fund Andra AP-fonden (AP2) has named the winners of its essay competition which awards SEK20,000 (€2,686) to the best thesis on finance and SRI to students at the University of Gothenburg. Students Anna Mattsson and Lina Sandstrom won the competition this year for their essay comparing the performance of ethical and conventional US funds. The competition is in its second year and is part of AP2’s move to integrate sustainability into its investment process, and desire to inspire students to write essays to raise awareness.h6. Governance

The Investor Forum – the new body charged with improving investor-corporate dialogue in the UK – is set to have its first meeting on October 27 according to Sacha Sadan, director of governance at Legal & General Investment Management, who headed up the forum’s ‘implementation team’. Sadan said the forum would be an investor practitioner forum including asset owners, asset managers and foreign ownership of the UK market.

Hong Kong has topped a corporate governance survey of Asian countries, followed by Singapore. The joint report by Asia equity brokers CLSA Ltd and the Asian Corporate Governance Association rated Japan third, China was ninth, while the Philippines and Indonesia ranked last. The report, the CG Watch, studies 944 companies in the Asia Pacific. Overall corporate governance scores slipped from 2012, with the biggest decline coming from Korea because of the rise in intergroup transactions and poorer disclosure.

Law firm Robbins Geller, on behalf of lead plaintiffs the Fort Worth Employees’ Fund, has won class certification in a $10bn mortgage-backed securities suit against investment bank J.P. Morgan. Judge J. Paul Oetken of the Southern District of New York certified a liability class of those who, prior to March 23, 2009, acquired any certificates from any of the nine 2007 J.P. Morgan mortgage-backed securities offerings identified in the opinion, Robbins Geller said it would “continue to aggressively pursue the case and prepare for trial”.

US pensions giant CalPERS has asked US district judge Charles Breyer to reject a proposed settlement between Hewlett-Packard Co and shareholders over the computer manufacturer’s ill-fated acquisition of Autonomy Plc. CalPERS argued that the judge should not approved the settlement deal, which will see shareholders drop claims against HP’s current and former executives, board members and advisers, before both sides disclose the amount of fees plaintiff attorneys would recover.

German exchange Deutsche Börse has joined the United Nations’ Sustainable Stock Exchange initiative (SSE) aiming to increase exchange-listed companies’ transparency and commitment to ESG issues and to make capital markets more aware of these issues. Hauke Stars, member of Deutsche Börse’s executive board, said: “Deutsche Börse would like to discuss matters such as best practice approaches in sustainability within the SSE. Further aims are to define the role of capital market infrastructure providers within the sustainability movement and to dovetail the SSE with parallel initiatives.”

The University of Texas System’s board has agreed to continued discussions on the possibility of divesting funds from Russia as relations between the US and the Russian government worsen because of conflict in Ukraine. The $US35bn University of Texas Management Company has around US$200m invested in Russia currently. Its CEO Bruce Zimmerman has said while divesting from Russia would not be an overly significant event, it could signal changes to the investment policies related to political and or social issues, leading to a substantial domino effect.