RI ESG Briefing, September 3: California pension funds facing coal divestment rules

Environmental

A bill which will force the US’s biggest public pension funds CalPERS and CalSTRS to exit coal looks set to become law after the California Assembly voted in favour yesterday. The last hurdle will be backing from Democratic Governor of California Jerry Brown, who is likely to formalise the bill in coming days, according to press reports. Link

The first six banks have signed the ‘Paris Pledge’ to avoid financing coal, according to campaign group BankTrack. It said ethical banks from Bolivia, Germany, Netherlands, Sweden and the United States become the first in industry-wide push. The banks are ASN Bank from the Netherlands; Banco Fie from Bolivia; Ekobanken from Sweden; New Resource Bank from California; and Ethikbank and Umweltbank from Germany, it added. The Paris Pledge campaign is aimed at ending the multi-billion dollar coal financing of the world’s private banks, and is backed by leaders of the fossil fuel divestment movement including 350.org and its founder Bill McKibben, Friends of the Earth France, Greenpeace International and Rainforest Action Network.

Agricultural Bank of China is reportedly planning to sell around $1bn worth of green bonds next month. Bloomberg News, citing unnamed sources, said timetable and size of the sale is subject to change and the final amount hasn’t been decided yet. It would be one of the first Chinese banks to sell green bonds, the report added. Meanwhile, the National Australia Bank (NAB) – one of Australia’s big four banks – has joined the Climate Bonds Partner programme. NAB was Australia’s first issuer of a Climate Bonds Standard certified bond.

Social

HESTA, the A$32bn (€20bn) Australian health and community services super fund, has committed
A$30m to creating a social impact investment fund. The fund, the Social Impact Investment Trust, will be managed by Social Ventures Australia. It will back social impact investments, such as social housing projects and social impact bonds.

Notenstein Asset Management (Notenstein AM), the Swiss house, has rebranded itself as Vescore AG and starts today (September 3) with CHF14bn (€12.8bn) in assets under management. Chief Executive of Vescore is former Notenstein AM Sales Head Aris Prepoudis. Deputy CEO is Andreas Knörzer, who helped pioneer sustainable investing in Switzerland during his 20-year tenure at Vescore rival J. Safra Sarasin. Like Notenstein AM, Vescore will be based in St. Gallen but also has offices in Basle – where most of its 180 staff works – Zurich and Lausanne. “Integrity, competence and sustainability are key to our efforts to further expand our business,” said Prepoudis in a statement. Vescore is a PRI signatory.h6. Governance

The Institute for Policy Studies (IPS) think tank has issued a study which found that executive pay at companies in the fossil fuel sector rewards behavior that offers no incentive to shift towards renewable energy. The Washington-based organization found that managers at the 30 largest listed coal, oil and gas companies in the US were paid more than leaders of other major corporations, according to a report in the Guardian citing “Money to Burn: How CEO pay is accelerating climate change”.

Proxinvest, the Paris-based proxy firm, says it has written to financial markets regulator AMF and the Chairman of telecoms firm Alcatel to determine whether there are any legal issues surrounding a “golden handshake” for departing Alcatel Chief Executive Michel Combes. Combes is leaving amid Alcatel’s merger with Finnish peer Nokia. In a blog post, Proxinvest said that among the things it wanted to find out was whether Combes’ original contract with Alcatel provided for the handshake. Combes is to get a stock award worth €4.5m in exchange for agreeing not to work for the competition for three years. Link

A US Federal District Court has ordered the Securities and Exchange Commission to expedite a law requiring oil, gas and mining firms to disclose payments to host countries. When the SEC issued a rule in 2012, the oil industry – led by the American Petroleum Institute– sued to overturn and the Court sent the rule back to the SEC on narrow procedural grounds. One year ago, Oxfam America sued the SEC in the US District Court for the District of Massachusetts to force the SEC to finish the rule.

Major fossil fuel companies including Russia’s Gazprom, ConocoPhillips and BHP Billiton have said they support an international deal that will limit global warning to 2 degrees at the upcoming UN Paris conference, COP21. CDP has collated climate change information from more than 2000 listed companies, including 28 of the largest energy firms – thirteen of these state their board backs a global climate agreement.

Investment staff at the UK’s Universities Superannuation Scheme (USS) earned an extra £4m in bonuses, according to a report in Times Higher Education citing USS’s latest accounts. It said the amount paid to staff under incentive plans rose by the sum in the year ended 31 March 2015 with strong investment returns. The top earner earned between £900,000 and £950,000, the report added.