RI ESG Briefing, Sept. 19: CalPERS welcomes SEC announcement on pay ratios

Environmental

The Norwegian Council of Ethics, which advises the government on exclusions from the Government Pension Fund, has reportedly recommended the divestment of oil and gas company Repsol over its operations in the Peruvian Amazon. The Guardian cited NGO Rainforest Foundation Norway as saying it has information the council recommended the move to the Finance Ministry and Central Bank two years ago. The Ministry and the Council declined to comment to the paper.

Irish bank AIB is reportedly in line to receive a €100m loan from the European Investment Bank to support lending for renewable energy projects. The Irish Independent, citing the EIB, said the loan would go towards a €200m fund dedicated to small-scale onshore wind farm, biomass and hydropower and solar-power projects.

The United Nations’ Food and Agriculture Organisation (FAO) has released a new set of climate change guidelines for forestry managers. “Climate change is impairing the ability of forests to deliver critical goods and ecosystem services. Forest managers urgently need to respond to a wide range of threats posed by climate change,” said Simmone Rose, FAO’s Forestry Officer.

Social

The inclusion of Bank of America in the Dow Jones Sustainability Indices has been met with dismay by BankTrack, the network which tracks the operations of the private financial sector. The NGO points to Bank of America’s plans to underwrite a share offering by Coal India as showing a “worrying disregard” for biodiversity and workers’ rights. “The decision to place Bank of America in a Sustainability Index at this time is shocking, and shows DJSI’s claim to represent “the gold standard for corporate sustainability” to be a mockery”, said Yann Louvel, Climate and Energy Campaign Coordinator at BankTrack.

FinEx Capital Management, the UK-based alternative investment group with around $1bn in assets, is bidding to acquire SRI pioneer Dexia Asset Management, according to a report in the Financial Times. It follows the collapse of an earlier €380m sale agreement with Hong Kong-based GCS Capital, the paper added.h6. Governance

The California Public Employees’ Retirement System (CalPERS) has welcomed the announcement from the Securities and Exchange Commission that it will start rule-making on new disclosures on pay ratios. “This further opens the window on CEO pay and will help shareholders to keep management accountable,” said the $265bn (€195.5bn) fund’s CEO Anne Stausboll.

The $170bn California State Teachers’ Retirement System (CalSTRS) has announced what it termed “overwhelming” corporate governance success during the 2013 proxy voting season. It said 77 of the 82 companies that it engaged with adopted a majority vote standard in corporate board elections, which requires that a sitting board member receive a majority of the shareholder votes cast in order to remain. “Our 93% success rate this year is particularly satisfying, because we changed our focus from large to small cap companies,” stated CalSTRS Director of Corporate Governance, Anne Sheehan.

Investors are asking US food group General Mills to take responsibility for recycling its post-consumer packaging waste. At the company’s annual meeting on September 23, shareholders will vote on a resolution filed by advocacy group As You Sow asking the company to assess post-consumer waste strategies, including a policy which shifts responsibility for packaging waste from taxpayers and governments to producers known as extended producer responsibility (EPR).

UK investors including insurer Prudential, Standard Life and Legal and General are reportedly considering joining the legal case against RBS relating to the bank’s £12bn rights issue at the height of the financial crisis. The Times reported the three, together with the Universities Superannuation Scheme, bought 10% of the shares that were sold in the rights issue.

The Australian Council of Superannuation Investors says vigilance from investors and boards saw average CEO fixed pay in the Top 100 companies fall for only the second time in 11 years. ACSI said its research indicated that a higher level of investor scrutiny since the global financial crisis, combined with the introduction of the ‘two strikes’ rule, have had an influence on remuneration outcomes.