RI ESG Briefing, Sept. 12: PGGM in natural gas infrastructure deal

Environmental

Dutch pension asset manager PGGM will acquire an interest in NOGAT B.V., owner of the Northern Offshore Gas Transportation system, which uses its own offshore pipeline network to transport North Sea natural gas to the Netherlands. PGGM will take over a 33.2% stake in NOGAT from GDF SUEZ E&P Nederland, subject to European Commission approval. “This investment fits in very well with the long-term commitments of our clients, the pension funds,” said PGGM’s Head of Infrastructure Henk Huizing.

The International Finance Corporation (IFC) has finalised a $212.5m debt financing arrangement with solar energy firm SunEdison. The debt proceeds will be invested in the construction of a SunEdison-owned solar power plant in Chile. Its construction should be completed in 2014. More details here

Trillium Asset Management’s Stephanie Leighton, Senior Vice President and portfolio manager, has testified before the Massachusetts Public Service Committee in support of fossil fuel divestment by the state’s public pension funds. She said: “I believe that an investment portfolio can provide competitive returns over the market cycle — while managing a conscious choice to avoid fossil fuel investment exposure — and I am pleased to know that this committee is exploring that option.”

The Diocese of Auckland in New Zealand has reportedly announced that it will divest from companies whose activity relies on the extraction and/or production of fossil fuels. The Diocese is the first institutional body in New Zealand to retract its investments from the fossil fuels industry.

Social

Index and ESG firm MSCI has announced the launch of a new ‘Manager on Campus’ product, which offers environmental, social and governance research (ESG), ratings and screening to academic institutions.

The Central Finance Board of the Methodist Church has announced the adoption of a new investment policy on human rights. The policy encourages the companies it invests in to promote human rights in the areas they operate in. Link. Governance

Danish pension fund Unipension, which runs three funds worth a combined DKK100bn (€13.4bn), is extending its guidelines on responsible investment to cover property investments and private equity, according to a report on IPE.com. It quoted the fund saying it is the first in Denmark to have written guidelines on responsible property investments.

United Nations General Assembly President, Vuk Jeremic, announced at the UN’s first meeting on the global credit rating system that courage was essential from policy makers for reform. He said the body could play an important role in establishing an “objective and reliable international rating system”.

Two US professors have proposed allowing firms to provide board services. The concept is called “Boards-R-Us” and has been put forward by Stephen Bainbridge of the University of California, Los Angeles (UCLA) and Todd Henderson of the University of Chicago. Such “board service providers” (BSPs) would increase board accountability. They write: “The potential economies of scale and scope in the board services industry (including vertical integration of consultants and other board member support functions), as well as the benefits of risk pooling and talent allocation, mean that large professional director services firms may arise, and thereby create a market for corporate governance distinct from the market for corporate control.”

The European Parliament has approved a law that makes the rigging of benchmark markets illegal. Companies found guilty could be fined up to 15% of their turnover. The law is set to be applicable within the next years. The new law follows the Libor rate-rigging scandal.

A review of federal court documents in the US shows that plaintiffs’ law firms have been awarded nearly $550m in fees from the 10 largest securities class-action settlements related to the financial crisis. The 10 largest class-action settlements following the crisis have produced more than $6.8bn in settlement funds.