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RI ESG Briefing, September 23: Citi, Bank of America, EIB, CalSTRS, Center for Political Accountability

The round-up of the latest ESG news

Environmental

Global banking giant Citi has become a Climate Bonds Partner, according to industry advocacy group the Climate Bonds Initiative. Philip Brown, Head of EMEA Fixed Income Public Sector and SRI Origination, said: “Earlier this year, Citi announced a goal to lend, invest and facilitate a total of $100 billion within the next 10 years to finance activities that reduce the impacts of climate change and create environmental solutions that benefit people and communities. This goal demonstrates our commitment to finding innovative ways to finance projects that lead to sustainable growth.” He said Citi was keen to work more closely with the Climate Bonds Initiative.

Hollywood star Leonardo DiCaprio has joined more than 400 institutions and 2,000 individuals who have promised to divest from fossil fuels – with new research from Arabella Advisors showed they hold total assets of $2.6trn. Titanic star DiCaprio was quoted saying by Reuters that climate change was “severely impacting” the earth and its inhabitants; he announced a pledge to divest on behalf of himself and the Leonardo DiCaprio Foundation, which supports conservation projects globally.

The European Investment Bank (EIB) has approved more than €17bn of new loans to support investment in telecommunications, water infrastructure, renewable energy, roads, schools and hospitals, and backed lending for small business investment across Europe and around the world. It also gave its support to a new climate action lending strategy, to strengthen the impact of its engagement for climate related investment and renewable energy. The EIB Climate Action strategy consolidates the target of ensuring that at least 25% of its lending supports climate related investment.

Social

The Ontario Securities Commission has announced the final agenda, discussion topics and list of panellists for the roundtable on September 29 to discuss women on boards and in executive positions. Speakers include Katherine Rabin, CEO at proxy firm Glass Lewis.

Goldman Sachs, Johnson & Johnson, NIKE, Procter & Gamble, Salesforce, Starbucks, Steelcase, Voya Financial, and Walmart have joined RE100, pledging to source 100% of their electricity from renewable energy to reduce CO2 emissions and seize the business benefits.
RE100 is a global campaign led by The Climate Group in partnership with CDP, to engage, support and showcase businesses committed to 100% renewable electricity.



Edinburgh University in Scotland has announced
that it will not invest in firms that manufacture “controversial” weapons such as anti-personnel mines, biological weapons and cluster weapons. The announcement is included in its latest responsible investment policy.h6. Governance

A range of institutional investors in Bank of America voted against ratifying a corporate bylaw amendment allowing the bank’s board the discretion to determine its leadership structure, allowing it to combine the roles of chairman and CEO. Those voting against management included PGGM, Canada Pension Plan Investment Board, California’s CalPERS and CalSTRS, the Florida State Board of Administration, Norges Bank Investment Management, the Texas Teacher Retirement System and the Ontario Teachers’ Pension Plan. Advisory firms ISS and Glass Lewis had both advised clients to vote against ratifying the amendment. Michael McCauley, the Florida fund’s senior officer-investment programs and governance was quoted as saying by Pensions & Investments that investors remained “hopeful the board will consider the recent investor feedback and apply it to any future board changes”. In the event, the vote passed with 63% backing.

CalSTRS has released its proxy season summary report. ‘Proxy access’ (the right of shareholders to nominate board directors) made up more than 28% of governance proposals compared to 6% in 2013-14. Also environment-related proposals increased from 69 last year to 90 this year. Link

The Center for Political Accountability, the US advocacy group, has launched a new website to serve as the “go-to” place to track corporate political spending. The one-stop resource for corporate political spending information in the 2016 elections will be available here. It includes information available for the first time on company political payments to leading US trade associations and company policies on contributions to so-called “dark money” organizations. It has links to publicly reported company political spending. In early October, findings of the 2015 CPA-Zicklin Index of Political Disclosure and Accountability will be added to the database – and the 2015 Index will cover the entire S&P 500 for the first time.

Bunge, the US agricultural firm that owns environmental investor Climate Change Capital, has reportedly developed a new cross-commodity policy to protect forests and reduce carbon pollution. It has pledged to eliminate deforestation from its supply chains worldwide, including soybeans, corn and sugar sourcing; it follows a similar commitment on palm oil sourcing last year. Leslie Samuelrich, president of SRI firm Green Century Capital Management was quoted as saying Bunge had listened to investors’ concerns in adopting strong environmental policies; it follows a shareholder resolution calling on Bunge to adopt a policy to eliminate deforestation across all its supply chains.

Romania: the Bucharest Stock Exchange (BVB) has taken what it says is an “important step” towards better corporate governance at Romania’s listed companies by adopting a new corporate governance code developed together with the European Bank for Reconstruction and Development (EBRD). The new framework comes into force on January 4 2016.