RI ESG Briefing, Sept. 30: NY’s de Blasio, NBIM, First State, Calvert, AP funds, CalPERS

Environmental

New York Mayor Bill de Blasio has called on the city’s five pension funds – which have a combined $160bn in assets – to divest from coal companies. They have $33m invested in coal, according to the mayor’s office. “New York City is a global leader when it comes to taking on climate change and reducing our environmental footprint. It’s time that our investments catch up – and divestment from coal is where we must start,” De Blasio said in a statement.

Norges Bank Investment Management, the manager of Norway’s NOK6.9trn (€725bn) Government Pension Fund Global, has advocated more transparency from investee companies regarding their efforts to deal with climate change and switch to a low carbon economy. In a letter to the CDP, which had solicited comment on changes to its climate change questionnaire, two NBIM managers write: “We believe that introducing measurement and reporting of sector-specific climate change challenges will facilitate a deeper and richer understanding of the operational challenges and risks for groups of companies.” As an example, the managers cited the disclosure of current and future greenhouse gas emissions. The NBIM managers also stressed the importance of including reporting on low-carbon products and targets for renewable energy consumption.

Asset manger First State has reportedly bought a wind power company in Portugal for two of its infrastructure funds. It said it was acquiring Finerge from Enel Green Power’s Spanish subsidiary, according to a report in IPE.com, which added the transaction is expected to close by year-end. The funds, the European Diversified Infrastructure Fund (EDIF) and the Colonial First State Active Infrastructure Income Fund (AIIF), are to co-own the company.

Social

Nearly all (82%) savers in defined-contribution (DC) pension plans offered by US employers would select a responsible investment fund if it were offered, a new survey conducted by Calvert Investments reflects. Moreover, one-third of the DC savers would put all of their money into responsible investment funds if they were offered, the survey showed. To compile the study, Calvert had around 1,200 DC savers in the US interviewed. Another interesting finding: More than two-thirds of the savers assumed that the responsible investment funds would be superior to conventional ones in terms of risk, volatility and performance.

The United Nations’ special rapporteur on extreme poverty and human rights, Philip Alston, has reportedly urged the World Bank to pay more attention to human rights. He accused the bank of hiding behind outdated statutes, according to a Reuters report. “For most purposes, the World Bank is currently a human rights-free zone,” he was quoted as saying – adding the bank treats human rights like an “infectious disease”. Reuters said he made the comments in a report to be presented to the UN General Assembly next month although it added the World Bank strongly rejected the charges.h6. Governance

Sweden’s national AP pension funds may drop Volkswagen amid the emissions scandal, according to a Bloomberg report citing fund officials. AP3’s Head of Corporate Governance Peter Lundkvist told the news agency that the funds’ Ethical Council would now evaluate the emissions scandal. “Volkswagen has been one of the best companies from a sustainability perspective, so this would have been incredibly hard for investors to detect,” Lundkvist was quoted saying – adding he was completely shocked by the magnitude of the scandal.

A range of leading institutional investors have hailed the corporate governance legacy of Sir Adrian Cadbury, the author of the first governance code, who died recently. “He gave his time and his thoughts generously, travelling all over the world to promote better-run companies,” the investors said in a letter to the Financial Times. “As major institutional investors who believe in the importance of good governance, we want to pay our respects to an outstanding man who was just as decent and modest as he was impressive.” The letter was submitted by Aviva Investors on the behalf of 30 large investment institutions.

CalPERS, the California pension giant and signatory to the Principles for Responsible Investment (PRI), says the PRI has given it the grade of ‘A+’ on its annual assessment report. In the report, PRI signatories disclose to the extent to which they are integrating ESG (environmental, social and governance) issues into the investment process and being active owners. Said Ted Eliopoulos, CalPERS Chief Investment Officer: “A commitment to sustainable investing is engrained throughout our investment beliefs.” CalPERS also said that it had received an ‘A+’ for ‘Listed Equity Active Ownership,’ adding that it shared the distinction with only seven other asset owners who are PRI members. Link

Shareholders in logistics giant FedEx have approved a Teamsters-backed resolution on proxy access – helping ease the path for shareholders to promote board candidates for the board of directors. It was the only shareholder proposal adopted during the company’s annual meeting, and the first such proposal to pass since 2010. A proposal calling for a review of links to the NFL team known as the Washington Redskins was rejected, according to reports.

ESG data provider RepRisk says its data will be used in the evaluation of the World’s Most Ethical Companies (WMEC) designation managed and published by Ethisphere. Ethisphere is involved in defining ethical business standards, serving companies worldwide through the provision of advisory and verification services for corporate ethics programs.

Proxy firm Institutional Shareholder Services (ISS) has released the results of its survey, which will influence the changes to its policies from February next year. A draft of the updated policy will be issued on October 26, and final policies in place by November. It said that the survey had 412 responses – 114 from institutional investors. Link