RI ESG Briefing, September 2: Church Commissioners, ABP, Bank of America, new green bond, CDSB

Environmental

Australia-based sandalwood producer TFS Corporation has said the Church of England will invest in 208 hectares of new plantations in the Northern Territory, according to reports. The Australian cited the company as saying the Church Commissioners for England would make a fourth investment in TFS’s plantations of new Indian sandalwood plantations. “This sale gives us a very solid start to the financial year for our institutional plantation sales program and demonstrates the strong demand pipeline for our plantations,” CEO Frank Wilson was quoted as saying.

The Nederlandse WaterschapsBank (NWB Bank) has launched a 10-year €1bn Green Bond transaction to support its lending to the Dutch water authorities. The transaction constitutes the second green bond outing from NWB Bank with proceeds earmarked to finance green projects from the Dutch Water Authorities and follows the issuer’s successful inaugural five-year €500m green bond benchmark transaction launched in June 2014. Buyers included ACTIAM, APG, AP2, Mirova Asset Management, La Mondiale, Union Investment, KfW, SEB Asset Management, Nordea Asset Management and Syntrus Achmea Vermogensbeheer. The issue was joint led by SEB.

The Dutch government will appeal against a district court ruling ordering it to cut emissions of greenhouse gases by 25% from 1990 levels by 2020. Deputy Minister for the Environment Wilma Mansveld announced the news in a letter to parliament saying “due to the consequences for climate policy…it is desirable for the ruling to be considered by a higher court”. The letter also said the government would begin implementing the court’s ruling as the appeal does not cancel its obligation to comply. Urgenda, an environmental group that filed the lawsuit on behalf of 900 Dutch co-plaintiffs, said it looked forward to the appeal process and urged the government to do more to slow climate change.

Social

The Church of England Pensions Board has issued £100m (€136m) of bonds. It will use proceeds from the bonds to purchase additional retirement properties, securing the future of clergy housing in retirement. The bonds are repayable in tranches between 2038 and 2048 and were issued through a special purpose vehicle, CHARM Finance plc. The transaction was arranged by TradeRisks Ltd with Pension Insurance Corporation as the sole investor.

The United Nations General Assembly has approved a resolution sending the draft ‘2030 Agenda for Sustainable Development’ to Member States for adoption later this month. Secretary-General Ban Ki-moon said it was the “start of a new era” – 15 years since the adoption of the Millennium Development Goals. World leaders are expected to adopt the text at a 25-27 September summit in New York. The 17 Sustainable Development Goals (SDGs), the main component of the new development framework, are comprehensive and address the social, economic and environmental dimensions of sustainable development in an integrated way, the UN said. Governance

ABP, the giant Dutch civil service pension fund, has reportedly
sold all its shares in pharmaceuticals maker Mylan for stocking a US prison where death sentences are carried out. Reuters says the move has been followed by other Dutch pension funds. ABP had €9m euros in the company before the divestment, down from €25m euros last year when it first approached Mylan with its concerns.

US pension giants CalPERS and CalSTRS have joined forces to oppose Bank of America allowing Brian Moynihan to be both its chief executive and chairman. They sent a letter to the bank’s lead director, Jack Bovender, insisting the roles of CEO and chair should be separate and complaining that the bank had underperformed under Moynihan. The bank’s board unilaterally changed the company bylaws to allow Moynihan to become chairman last year. Later, the company said it would hold a shareholder vote on the change – CalPERS and CalSTRS will vote against it. Pensions & Investments reported that officials from the Florida State Board of Administration (SBA) planned to meet the bank’s management to discuss it’s proposal seeking shareholder approval of a bylaw amendment allowing the board leeway on having an independent chairman. Link

A statement on fiduciary duty and climate change disclosure that is being coordinated by the Climate Disclosure Standards Board is growing with the news that it now has more than 100 signatories. South African energy group Sasol was the 100th to sign up. The statement – an expression of collective commitment by a leading group of companies and institutional investors – was launched at the UN’s Climate Change Summit in New York last September.

Democratic presidential candidate Hillary Clinton has endorsed a proposed law preventing corporates from paying bonuses to their executives for leaving to take senior government jobs. In an op-ed in the Huffington Post, Clinton said the “so-called revolving door” between government and Wall Street firms in particular, eroded public trust. “That’s when people start worrying that the foxes are guarding the hen house”, she wrote of the planned Financial Services Conflict of Interest Act.

US law firm Robbins Geller says it has scored a victory in a securities class action suit against Prudential Financial alleging it issued false and misleading statements about the company’s financial condition. The United States District Court for New Jersey has denied Prudential’s request to exclude the opinion of lead plaintiffs’ expert Professor Steven P. Feinstein. The court says he has produced evidence showing “statistically significant changes in Prudential’s stock price following important financial disclosures. In the face of these, Defendants have not successfully proven lack of price impact”. The case continues. Link

Retail investors in the US largely voted against ‘proxy access’ proposals in the 2015 AGM season, according to a new report from Broadridge Financial Solutions and PwC’s Center for Board Governance. Their final ProxyPulse report for the year covers 4,280 shareholder meetings held between January 1-June 30 and provides aggregated data and analysis, including share ownership trends and voting results.