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RI ESG Briefing, Sept 24: Canadian authorities respond to proxy voting consultation

The round-up of environmental, social and governance news

Environmental

Hermes, the fund firm ultimately owned by the BT Pension Scheme, has teamed up with Scottish Equity Partners to buy a stake in UK energy efficiency services firm Anesco from Zouk Capital, the private equity and infrastructure fund manager. Zouk co-founded Anesco, which has a turnover of £55.1m (€65.5m) in 2010 and the move is a first exit for Zouk’s second Growth Capital fund. Financial terms were not disclosed.

Trillium Asset Management’s Stephanie Leighton, Senior Vice President and portfolio manager, has followed up her testimony at the Massachusetts Public Service Committee in support of fossil fuel divestment with further comments in support of environmental infrastructure bonds. On September 18, Leighton testified at the Massachusetts State House in favor of House Bill 3332 on clean energy. She said: “We would welcome the opportunity to invest in bonds for capital projects focused on environmental needs and projects. We believe that such bonds are important because they allow clients to help support infrastructure development for environmental needs and projects, while still earning a healthy return.”

German wind energy firm PNE AG has bought three offshore wind parks (Atlantis I, II and III) in the North Sea from rival BARD Engineering for €17m. BARD recently laid off 120 of its workers, saying project investors have not materialised. Its first project, “BARD Offshore 1,” is a 400MW facility in the North Sea that came on stream at the end of August, costing sole owner, German bank HypoVereinsbank, at least €710m. Listed PNE also said the BWVA, a €10.3bn pension fund for doctors in Baden-Württemberg, had cuts its stake to under 3%.

Social

The United Nations’ Commission on Sustainable Development – formed in the wake of the 1992 Rio “Earth Summit” – has held its final session. It will be superseded by the new High-level Political Forum on Sustainable Development. Announcement

Sixty-seven percent of chief executives believe that business is not doing enough to address global sustainability challenges, according to a survey by the United Nations Global Compact and consultants Accenture. The “vast majority” now call for action to incentivize and reward sustainability leaders and unlock the full potential of the private sector. The UN Global Compact-Accenture CEO Study on Sustainability 2013: Architects of a Better World also includes in depth interviews with 75 CEOs and an analysis of those companies that successfully combine sustainability leadership with market leading business performance.h6. Governance

The Canadian Securities Administrators, the umbrella body for the country’s provincial and territorial authorities, will take a “policy-based approach” providing guidance on recommended practices and disclosure for proxy advisory firms to “improve transparency and understanding” among market participants. It follows a consultation which ended on September 21. The CSA intends to publish its proposed approach for comment in the first quarter of 2014. Link

Staying in Canada, the Ontario Securities Commission is hosting a roundtable on October 16 to discuss its recent paper, Disclosure Requirements Regarding Women on Boards and in Senior Management. “The roundtable discussion will help inform next steps on this initiative,” the OSC said. Among the panellists are Jim Leech, head of the Ontario Teachers’ Pension Plan, Pamela Jeffery of the Canadian Board Diversity Council and Kathleen Taylor of the Royal Bank of Canada.

Fidelity Worldwide Investment has warned 400 UK companies that it invests in to reform their executive pay practices or risk losing remuneration votes at annual meetings, the Financial Times has reported. The FT said it was a “big step” given that shareholder votes will be binding on companies from October. Fidelity, the paper added, wants firms to increase the time managers must retain their shares from three years to five before they are allowed to sell – to encourage long-term planning.

US pension fund the Operating Engineers Pension Trust has had its lawsuit against UBS thrown out by a US federal court. The fund had claimed the Swiss investment bank misled it during the sale of $2.5bn (€1.8bn) worth of mortgage-backed securities. The US Court of Appeals ruled that the Alameda-based investor had missed the one-year deadline of seeking damages on the federal level after suing UBS on the state level. The scheme, which invested $5.1m in the securities in 2007, first sued UBS over the sale in a California state court in 2008. Its second complaint against just the bank was filed in federal court in New Jersey in 2010.

PGGM, the €140bn Netherlands-based pension fund manager, is calling for more independent directors and a CEO succession plan at Toronto-listed mining giant Barrick Gold, according to the Wall Street Journal. PGGM is believed to be one of some 10 institutional investors that have written to Barrick.