RI ESG Briefing, Sept. 12: CalPERS and Wellington team up on “P-ROCC” initiative

The latest sustainable finance developments


The California Public Employees’ Retirement System has teamed up with Wellington Management on a new framework designed to help companies assess and disclose the potential effects of the physical risks of climate change, or “P-ROCC”, on their business. They define physical risks as inclusive of but not limited to extreme heat, drought, wildfires, hurricanes, flooding, and water access. It’s the result of a collaboration announced in September 2018.

Basque pension fund Geroa has reportedly taken a stake in Spanish renewable power retailer Holaluz as part of a €50m investment round, which is expected to conclude by the end of 2019. As part of the deal, Geroa’s leader Virginia Oregui will join the board of Holaluz.

Candriam, which announced record assets under management (AuM) of €125bn, has committed to carbon neutrality “with immediate effect”. The European asset manager will partner with sustainability financing solutions provider South Pole to offset an estimated total of 9,400 tonnes of annual CO2 emissions, covering Scope 1,2, and 3 emissions.

Italian energy giant Enel has launched what it describes as the first “general purpose SDG [UN Sustainable Development Goals] linked bond”, through its Dutch-registered finance company Enel Finance International. The $1.5bn bond, which was oversubscribed by almost three times, launched on the 5 September. BNP Paribas, Citigroup, Credit Agricole, Goldman Sachs, Morgan Stanley and Société Générale were among the joint-book runners on the deal.


Dutch pension asset managers PGGM and APG have launched a new asset owner platform that uses artificial intelligence to help investors assess the extent to which investable companies contribute to the UN’s sustainable development goals. The SDI Asset Owner Platform, which RI covered in July, was launched at PRI in Person yesterday.

CalSTRS has held a discussion, at California State Treasurer Fiona Ma’s request, about whether to continue investing in real estate firm CBRE Global investors. Over the last two years, two properties in which CalSTRS invested through CBRE have been the subject of labor disputes, CalSTRS said, adding that Ma has led efforts to ensure responsible investment practices and mitigate the risks to investors from sexual harassment. Ma has also called on CalSTRS to divest from fossil fuels, according to a Pensions & Investment report citing her spokesperson. It quoted Mark Desio as saying that she was starting with CalSTRS and then may go on to CalPERS.

AIB has become the first Irish bank to become a founding signatory to the Principles for Responsible Banking, the sustainable banking framework developed by the United Nations Environment Programme Finance Initiative and global banks. It follows AIB’s Summer commitment to provide €5bn in funding to support Ireland’s transition to a lower carbon economy.h6. Governance

Law firm Debevoise & Plimpton has authored a new legal memo for the Principles for Responsible Investment on the duties of company directors who sit on private equity-backed portfolio company boards to consider the ESG risks and opportunities those companies face. The firm said the memo is focused on the duties of UK company directors and that the PRI has commissioned a follow-up note on the duties of US company directors.

Sweden’s AP funds and their Ethics Council have brought together regulators and the CEOs of four of the region’s largest banks – Nordea, SEB, Handelsbanken and Swedbank – to discuss the issue of money laundering and financial crime. Link

The NZ Super Fund has engaged an independent vet after a video emerged of mishandling of animals at one of its farms. Its farmland manager FarmRight immediately commenced an investigation with the contractor. NZ Super said the contractor commenced an employment investigation with the individual concerned, adding: “As a long-term responsible investor, we expect our farms to meet best and market leading standards.”

Ten of the UK’s largest pension schemes representing £150bn in assets have backed the Cost Transparency Initiative, which encourages the standardised reporting of cost and charges. USS, National Grid UK Pension Scheme and RBS Group Pension Fund were among the schemes adopting the framework, which launched in 2018 with the support of the Pensions and Lifetime Savings Association (PLSA), the Investment Association (IA) and the Local Government Pension Scheme Advisory Board.

ESG research house Vigeo Eiris has launched a new artificial intelligence (AI) rating on the extent to which companies are considering and managing the impacts associated with the technology, which is increasingly becoming a topic in corporate responsibility. In May, 42 OECD member and partner countries officially adopted the first set of intergovernmental principles on AI.

A record number of European listed property companies are now reporting sustainability data, following a 30% uplift in 2019, according to the European Public Real Estate Association (EPRA), the voice of the publicly traded European real estate sector. 150 out of 158 companies assessed by real estate firm JLL reported their ESG data in line with at least part of the Association’s Best Practices Recommendations.

Pensions law firm Sackers & Partners has released a client survey on attitudes to ESG investing. Over 100 pension scheme trustees and managers were surveyed and a key finding was that trustees’ primary focus is a financial one, while “confusion” around the extent to which member views should be taken into account persists.

ESG house Sustainalytics has published investor guidance on integrating children’s rights into investment decision making in partnership with UNICEF. The new guidance ties in with the 30th anniversary of the Convention on the Rights of the Child, the most widely ratified human rights treaty in history.