RI ESG Briefing, October 9: Glasgow Uni sells off fossil fuel assets

The round-up of environmental, social and governance news


The Development Bank of Japan has issued a €250m green property bond, according to industry group the Climate Bonds Initiative. The three-year issue pays a coupon, or interest rate, of 0.25% and was three-times oversubscribed, the initiative added. The underwriters were Bank of America Merrill Lynch, Morgan Stanley, Citi and Daiwa and proceeds of the bond are allocated to a pool of five green buildings.

The European Bank for Reconstruction and Development (EBRD) and the US’s Overseas Private Investment Corporation (OPIC) have partnered with solar tech firm SunEdison on a $50m, 23.8MW solar power plant in Southern Jordan. Construction will begin in the fourth quarter of this year with interconnection expected to occur in the third quarter of 2015. The solar PV plant will sell electricity to the Jordanian National Electric Power Company (NEPCO) under a 20-year power purchase agreement.

Glasgow University has become the first university in Europe to pledge to sell shares it holds in companies that produce fossil fuels. The university will withdraw £18m in investments over the next decade. It follows a student campaign calling for change. Alongside this, the City of Moreland has become the first council in Victoria to rule out direct investments in fossil fuels and the first council in Australia to start developing a strategy to move away from financial institutions that fund fossil fuel developments. This month, Swiss banking group UBS released a paper saying the fossil fuel disinvestment campaign is “a social movement with legs”.

The UN Global Compact’s CEO Water Mandate initiative has released the finalized Corporate Water Disclosure Guidelines – a common approach for companies to effectively and intelligibly disclose the many elements of their corporate water management practice to key stakeholders. Launched in 2007 by the UN Secretary-General, the CEO Water Mandate is overseen by the UN Global Compact, and implemented in partnership with the Pacific Institute. Link


A group of institutional investors led by Chicago billionaire J.B. Pritzker are to invest $16.9m in a social impact bond programme aimed at supporting pre-kindergarten schemes for more than 2,000 low-income children in Chicago over the next four years. The J.B. Pritzker and M.K. Pritzker Family Foundation is investing $4m, while Goldman Sachs is backing the social impact bond with around $7.4m through its Social Impact Fund. The Northern Trust Corp is investing $5.4m as part of its community development portfolio. City officials said that Chicago will pay about the same interest rates as they would for more traditional financing mechanisms. They said they don’t expect those rates to top 8%.

Germany-based index firm Solactive has launched the Ethical US Equity Index, designed to follow US-listed ethical stocks selected according to a best-in class-approach. It has been licensed to BNP Paribas, which will use it as a basis for structured products. It follows the launch of the Solactive Ethical Europe Equity Index in April 2013, also licensed to BNP Paribas. The index had input from French ESG house Vigeo, whose chair Nicole Notat said: “We hope this new index will be as successful as the Ethical Europe Equity Index has been.”The Global Reporting Initiative (GRI), the United Nations Global Compact and the World Business Council for Sustainable Development (WBCSD) have joined forces to “mobilize the private sector as a key player” in achieving our world’s Sustainable Development Goals (SDGs). The SDGs will be launched by the UN in September 2015, and the partnership brings together an international network of professionals as well as perspectives of forward-thinking companies from around the world. “Together, we will produce an implementation guide on impact assessment, KPI [key performance indicator] selection and goal setting, a publication that will support businesses in assessing their impacts, aligning their strategies with the SDGs and setting company goals,” they said.


UK campaign group ShareAction is launching a Responsible Investment Network for UK operational charities to complement its existing network for endowed trusts and foundations. ShareAction set up the Charities Responsible Investment Network for endowed trusts and foundations in the Spring of 2013 as a way for members to “fulfill their charitable purposes through shareholder engagement with companies”. The network for charities is planned for a launch in the next 12 months.

The Independent Research in Responsible Investment (IRRI) Survey 2014 has been launched and will run through October. It had over 600 voters in 2013 from asset managers, owners, research providers, sell-side and quoted companies and is run by Extel WeConvene and www.sri-connect.com. Steve Kelly of Extel WeConvene said: “IRRI gives these market participants the chance to express these opinions and gives everyone the chance to see the shape of this emerging global research market.” Mike Tyrrell of www.sri-connect.com added: “Information is what moves markets – and the markets in SRI and Corporate Governance research are no different. I would encourage anyone who has an opinion on how these markets should develop to vote and to encourage their colleagues, clients and other contacts to vote.”

It’s been reported that more than 80 environmental, labour and civic groups have urged online auction giant eBay to end its association with the American Legislative Exchange Council (ALEC) lobby group. Reuters reported the move comes weeks after search engine titan Google abruptly left ALEC over its views on climate change. It said the groups have written to eBay asking it to reconsider its links to ALEC over its “extreme agenda”.

Ethos, the governance advisory firm owned by Swiss pension funds, has published its first report on the implementation of the ‘Minder initiative’ and its 2013 board and executive remuneration study. Of the 136 companies subject to the ruling, 96 (70%) have already put to the vote various amendments to the articles of association, namely those that fix the vote modalities for board and executive remuneration. However, only 29 companies (21%) have already proposed at the 2014 AGM a binding vote on the amount of board and executive remuneration, Ethos said.

Mirova, the responsible investment arm of French asset manager Natixis, has published a review of stakeholder engagement in Europe. The 26-page document, written by Zineb Bennani, Head of Governance and Engagement, aims to “provide an overview of the issues, actors and current trends affecting shareholder engagement in Europe and the US that explains the objective basis for Mirova’s choices within its own engagement policy”.