RI ESG Briefing, October 3: Call to force pension funds to vote at company AGMs

Environmental

CDC Climat, the subsidiary of French state investor the Caisse des Dépôts, has teamed up with Solvay Energy Services, an arm of Belgium-based industrial group and Japanese trading house Marubeni to form a joint company to finance and lead an energy efficiency project at a Solvay plant in La Rochelle, France.

The Norwegian Ministry of Finance has signed an agreement with the Nordic Environment Finance Corporation, NEFCO, to purchase carbon credits in the second commitment period of the Kyoto Protocol. Norway will purchase up to 30m credits from “stranded” UN-approved projects facing a risk of discontinuation due to the low prices.

Greencoat UK Wind, the listed wind energy vehicle which raised £260m in March this year, has agreed to acquire two UK wind farms from Germany-based BayWa for a total of £70m. The facilities are the Cotton Farm and Earl’s Hall farms in Cambridgeshire and Essex, which have a capacity of 16.4MW and 10.25MW respectively.

Social

Olaug Svarva, head of NOK148bn (€18.4bn) Norwegian state investor Folketrygdfondet, has hailed the country’s law requiring at least 40% of listed firms’ directors to be female – saying it made boards more professional and globally focused. That’s according to Reuters, citing remarks made at its Nordic Investment Summit. Norway became the first country to impose such gender quotas in 2003.

The payday loan industry in the UK is not meeting industry standards, according to the government. It comes as the regulator, the Financial Conduct Authority (FCA) has today published its own consultation on the rulebook that the industry should be meeting from April next year. Consumer Minister Jo Swinson said: “We warned the industry months ago that if it didn’t get its house in order we would step in. Now the FCA has come out today and published strong actions which will tackle the problems the market has failed to address.”h6. Governance

It should be mandatory for pension funds to vote at company annual meetings, according to Gianluca Manca, the Head of Sustainability at Italy’s Eurizon Capital who is a senior figure at the UN Environment Programme Finance Initiative (UNEP FI), the global partnership between UNEP and the financial sector. Speaking at an event held at the European Parliament yesterday (October 2), Manca called for pension funds to be forced to exercise their voting rights. Manca is co-chairman of both the Asset Management Working Group and the Investment Commission at the 200-signatory UNEP FI, where he is also Treasurer. Eurizon, part of the Intesa Sanpaolo Group, is one of Italy’s largest asset managers, with around €177bn under management.

The Securities and Exchange Commission (SEC), the US regulator, has given US restaurant supplier Sysco permission to omit from its upcoming annual general meeting a shareholder proposal that, given a change of management, would prevent departing executives from getting stock awards that are not based on performance. The proposal was filed by the US blue-collar union Teamsters, which owns 280 shares in Sysco. “We do not question that some form of severance payment may be appropriate. We are concerned, however, that current practices at Sysco may permit windfall awards that have nothing to do with an executive’s performance,” wrote the Teamsters in their proposal.

The Canadian Coalition for Good Governance, which has 46 members who manage nearly C$2trn in assets, has set out its views on companies with dual class shares. There are currently 77 such companies, exclusive of investment funds, listed on the Toronto exchange.

A lawsuit brought by US pension fund, the Operative Plasters’ and Cement Masons’ Local Union Officers’ and Employees’ Pension Fund against directors of banking giant State Street has been dismissed, according to reports. Law360.com reported that a federal judge dismissed the shareholder derivative suit that had accusing directors of costing the bank billions for their lack of oversight of foreign exchanges activities.