RI ESG Briefing, Oct. 2: Robeco, PRI, Trina Solar, IGCC, Interfaith Center on Corporate Responsibility

Environmental

Trina Solar, the China-based, New York-listed solar photovoltaic firm, says it is issuing $100m (€79m) of five-year convertible bonds with a 4% annual coupon (interest rate). The issue is being underwritten by Deutsche Bank, Barclays and Credit Suisse; Roth Capital Partners is co-manager. Trina plans to use the proceeds for “general corporate purposes”, which may include the development of solar power projects and their general financing requirements, expansion of manufacturing capacity and working capital.

The 350MW second phase of the giant Noor-Ouarzazate Concentrated Solar Power Project in Morocco will be funded to the tune of US$519m from the World Bank. An initial 160MW phase of the project, approved by the Bank in 2011, is currently under construction. The new project will finance the second phase; it will be funded through $400m from the Bank and $119m from its Clean Technology Fund. Other contributors toward the project are the African Development Bank, the European Investment Bank, France’s AfD, Germany’s KfW and the European Commission. Link

The Investor Group on Climate Change (IGCC), which represents Australian and New Zealand institutional investors with total funds under management of approximately A$1trn (€690bn), has published an open letter to Australian Prime Minister Tony Abbott urging the government to retain the Renewable Energy Target (RET). The letter urges the Federal Government to keep Australia an “attractive investment destination” by maintaining its previous support for the target. “To invest in Australian energy markets, investors need to see clear signals that clean energy investment is welcome, not the opposite,” said IGCC Chief Executive Nathan Fabian.

Social

The Central Pacific Conference of the United Church of Christ, a community of congregations in Oregon, southern Idaho and southern Washington, has called for divestment from companies linked to Israel’s activities in the West Bank and Gaza Strip. The motion was adopted at its annual meeting in Oregon at the end of last month in a 101-11 vote. The resolution, which comes after “years of corporate engagement” and shareholder resolutions, calls for divestment from companies including Caterpillar, Motorola Solutions, G4S, Hewlett-Packard, and Veolia.

Advocacy groups the Interfaith Center on Corporate Responsibility (ICCR) and As You Sow have decided to file shareholder resolutions with the parent companies of film studios over the issue of depicting cigarette smoking in movies, according to a New York Times report. “We think we’ve given the movie studios enough time,” campaigner Sister Nora Nash of the Sisters of St. Francis of Philadelphia was quoted saying. Resolutions have been filed at Paramount parent Viacom and at Walt Disney, the report added.h6. Governance

Japanese corporate governance is “rapidly gaining momentum” according to asset manager Robeco. Carola van Lamoen, Head of Governance and Active Ownership at the firm, was part of an investor delegation from the Asian Corporate Governance Association (ACGA) to the country recently following the launch of the Japanese Stewardship Code. “Together with representatives from parties such as BlackRock, CalPERS and Norges Bank IM, I observed that observed that Japanese corporate governance is rapidly gaining momentum,” she says in a blog posting. Van Lamoen is co-chair of the Corporate Risk Oversight Committee of the International Corporate Governance Network (ICGN) and a member of the Investment Committee of Eumedion, the Dutch corporate governance platform.

The Principles for Responsible Investment (PRI) has launched a guide on fixed income, saying an analysis of Environmental, Social and Governance (ESG) issues such as corruption and climate change should be considered as a natural fit for fixed income investors as it can help to manage risk and identify credit strength. The report is based on interviews with major fixed income investors and support from an investor working group.

UK Business Secretary Vince Cable has written to UKSIF, the Sustainable Investment and Finance Association, on fiduciary duty saying he recognizes that there is “significant support for clarification in statute”. The UK government is set this month to respond to the UK’s Law Commission’s recommendations on fiduciary duty, which stop short of advocating a change in law, preferring to attempt to clarify existing rules, particularly around how pension trustees address ESG issues.

Pensions Caixa 30, at €4bn Spain’s largest pension fund, is reportedly set to start a programme of socially responsible investing across its entire portfolio. Citing chairman Antoni Canals, IPE.com reported that the fund, which is a signatory to the PRI, believes the move will lead to good long-term returns and less volatility. The fund will cut its fixed income exposure in favour of more illiquid assets, it added.

Drinks giant Coca-Cola, following criticism of executive share rewards from a range of investors, has adopted new guidelines to limit its stock compensation plan and improve transparency, according to reports. Reuters reported the move follows Coke’s 2014 annual meeting where a number of shareholders abstained from voting on its equity plan. Vocal critic Wintergreen Advisors said: “No amount of backtracking by the Coca-Cola board of directors can hide the fact that we believe it tried to sneak one by shareholders in Coca-Cola’s proxy materials and statements at the April shareholder meeting.”