RI ESG Briefing, Sept. 19: Denmark’s PFA provides mezzanine debt in huge offshore wind deal

The latest ESG developments


Danish pension fund PFA has provided mezzanine debt for a huge offshore wind farm transaction. Ørsted, the former DONG Energy, has signed an agreement to sell 50% of the 1,218MW Hornsea 1 project to infra giant Global Infrastructure Partners. The project – in the North Sea off the coast of England — will be the world’s largest offshore wind farm when commissioned in 2020 and the total price of the deal is around £4.46bn (€5bn). GIP will partially finance the buy with a package of more than £3.5bn, containing a mixture of investment grade-rated project bonds issued to a consortium of “blue chip institutional debt investors with strong UK presence”, commercial bank loans and the PFA contribution. The financing is claimed to be the largest single-project financing ever in the global renewable energy sector.

Local Government Super (LGS), the Australian super fund that uses a responsible investment approach, has been recognised as a Low Carbon Hero by NGO 350.org Australia for its position as the fund with the largest, most significant portfolio divested from fossil fuels.

Real estate ESG data body GRESB has teamed up with Measurabl, software for real estate sustainability data management, to create a new GRESB ESG Data Quality Standard and Quality Metric. The aim is to “elevate and enable” the use of sustainability data in any commercial real estate transaction.

Paris-based quant house TOBAM has adopted a carbon footprint reduction policy across all its equity strategies and indices.

S&P Global Ratings believes that “significant opportunities exist” in green sukuk issuances, with the untapped sukuk market valued at $143bn in 2017. According to a report on the Sharia-compliant financial instrument, a number of core Islamic finance countries in ASEAN and in the Gulf will be looking to finance ambitious targets for renewables through capital markets over the coming decades. The report concludes that excess demand could benefit issuers in the form of “higher appetites, lower pricing or longer maturity”.


Forty-six percent of high earners would consider a socially responsible approach to investing, but not at the expense of investment returns, new research conducted by investment manager Albion Capital has found. This compares to just 30% who would risk some investment return to pursue a more socially responsible strategy.

CIMB, a Malaysian banking group, has announced preferential financing rates for hybrid vehicles and Green Building Index (GBI) certified properties. Eligible customers will be offered financing at 10 basis points (0.10%) lower than the otherwise applicable interest rate. The bank is a founding member of UNEP FI and said that this program demonstrated its commitment to “embracing ESG principles group-wide”.

The Canadian Imperial Bank of Commerce has announced Canada’s first social bond framework which advances gender diversity in corporate leadership positions. CIBC has sold C$1bn of three-year deposit notes to support its lending to companies with female management.h6. Governance

A Dutch court has ruled in favor of an investor vehicle that is seeking compensation for the notorious Operation Car Wash corruption scandal at Brazilian oil company Petrobras. The District Court in Rotterdam has ruled in favor of Stichting Petrobras Compensation Foundation regarding arguments to establish jurisdiction in the Netherlands for eligible Petrobras investors seeking compensation for losses related to the scandal.

Glass Lewis is to integrate SASB guidance on material ESG topics into its cornerstone research and voting services. The advisory firm announced it has permission to display the SASB content within its Proxy Paper research reports and vote management application, Viewpoint, saying: “Users of Glass Lewis’ services will be able to easily identify whether items are aligned with the SASB standards, helping inform the clients’ proxy voting and engagement activities.”

Sustainalytics has launched its next generation ESG research and ratings. Sustainalytics’ ESG Risk Ratings measure a company’s exposure to industry-specific material ESG risks, and how well a company is managing those ESG risks. Investors can use them for ESG integration, investment analysis, index and fund creation, voting and engagement, and screening and benchmarking. Announcement

Lobby group BusinessEurope apparently plans to push against European Union plans to boost action on climate change, according to a leaked memo obtained by Greenpeace. The EU is to propose strategy to help deliver on the 1.5C warming target that’s part of the Paris climate agreement. But the leaked document from the umbrella group says it will “oppose the new increase of ambition” and “challenge the process”. Green MEP Molly Scott Cato told Unearthed she was shocked by the news though BusinessEurope member the Confederation of British Industry (CBI) stood by the group.

The Financial Reporting Lab – part of UK watchdog the Financial Reporting Council – is inviting investors and companies to participate in a new project on the disclosure of climate change and workforce information. The project will examine how the Lab’s recommendations on business model reporting, risk and viability and performance metrics apply to companies’ reporting on climate change and their workforce.

Candriam Investors Group, the €108bn pan-European fund manager, is to divest from coal, tobacco and chemical, biological and white phosphorus weapons, to be fully completed by December 31.

Investors representing around $6.4trn in assets have said they will engage with investee companies on deforestation in cattle supply chains – because of associated material risks and impact on climate change. Hermes EOS, Robeco, BNP Paribas and APG were among 44 investors to say in the document they expect companies to “demonstrate commitment to eliminating deforestation within their supply chains, and will seek evidence of this on multiple levels”.