RI ESG Briefing, September 30: EU non-financial reporting directive set to come into force

Environmental

SRI asset manager Boston Common has laid claim to successfully lobbying Norway’s Statoil ASA to halt its steam-driven oil sand projects in northern Alberta for three years. Boston Common led a coalition of US investors to put pressure on Statoil. Norwegian investors such as Storebrand and activist groups such as Greenpeace Norway and World Wildlife Fund Norway also lobbied Statoil. The company said its decision to shelve its multibillion-dollar oil sands project was rising construction costs and delays in new export pipelines.

London-based Impax Asset Management has signed a €106m financing deal with KfW IPEX-Bank for its 51MW Kuke windfarm in Finland owned by Impax New Energy Investors II, its private equity fund dedicated to investments in renewable energy infrastructure. Impax has also acquired an additional Finnish wind farm with an output of 27MW. The two projects bring the total installed capacity of Impax’s Finnish wind portfolio to 105MW. This includes the 27MW Joukhaisselka wind farm which was project financed earlier this year.

The Inter-American Development Bank has provided loan finance for two of the first commercial-scale wind power projects in Peru. It has lent $23.2m and $44.1m to the Marcona and Tres Hermanas wind farm projects in the department of Nazca, south of Lima. “The IBD’s financing of these two projects will send a strong signal to potential investors in Peru’s wind market,” said Jean-Marc Aboussouan, chief of the infrastructure division of IBD.

Social

Engagement specialist GES has launched a new offering, GES Assessment on Government Bonds, which provides an overview of international sanctions with relevance to government bonds, and has in-depth and fully updated research on potentially controversial countries. Additionally, GES will offer a monitoring service, where clients will be advised on new sanctions or sudden changes in a country. It is fully aligned with the recent “Guidelines on Responsible Investment in Government Bonds” from the Danish Council on Corporate Responsibility.

The Principles for Responsible Investment (PRI) announced the winners of the Sustainalytics Awards for Excellence at this year’s PRI Academic Network Conference. The theme for the 2014 conference was ‘Bridging the gap between academics and practitioners’. Best Paper went to Fabrizio Ferraro of the IESE Business School and Daniel Beunza (London School of Economics) for their Why talk? A process model of dialogue in shareholder engagement.

The fourth annual US CPA-Zicklin Index, which tracks voluntary disclosures of political spending of the top 300 companies in the S&P 500, has found improved transparency despite the absence of effective regulation. CPA also found that engagement by investors has resulted in more than 120 companies adopting some form of political spending disclosure. The index is produced by the Center for Political Accountability (CPA) and the Zicklin Center for Business Ethics Research.h6. Governance

The European Council, the heads of state body of the EU, has adopted the directive on disclosure of non-financial and diversity information by large companies and groups. Companies concerned will disclose information on policies, risks and outcomes as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors. The European Parliament adopted the Directive on April 14 2014 and following adoption by the Council, it will be published in the EU Official Journal and enter into force 20 days later. Member States will have two years to transpose the Directive into national legislation.

A proposal by the International Brotherhood of Teamsters General Fund calling for FedEx to stop paying the personal taxes owed on restricted stock awards on behalf of its named executive officers gained 34.5% of the vote at the company’s annual meeting on September 29. A proposal lead filed by the Oneida Tribe of Indians of Wisconsin along with a group of SRI investors calling for FedEx to drop links with the NFL Washington Redskins team was defeated by 203,521 votes for vs. 228,611,233 votes against.

The Autorité des marchés financiers (AMF), the French market regulator, has identified “potential improvements” as part of an inventory of disclosures and corporate governance practices based on a sample of 60 listed companies. Its 2014 Annual Report on corporate governance and executive compensation reflects further improvements in practices regarding governance and transparency. The report also provides an overview of on-going European debates, in particular the proposal to amend the directive on shareholders’ rights, which could introduce a compulsory “say on pay” vote. Link

Ethos, the Swiss proxy firm backed by pension schemes, has said it will step up its engagement with listed Swiss companies and with the Swiss bourse SIX to get them to publish “precise objectives with regard to greenhouse gas emissions.” According to Ethos, only 36% of the 160 firms it recently scrutinised provided any information on the emissions. And only a fifth of the firms publish targets for reducing them. Ethos also urged SIX to join the Sustainable Stock Exchanges (SSE) initiative.

Starbucks shareholder Harrington Investments has filed a proposal asking the global coffee-house to establish an independent sustainability committee to oversee issues such as global climate change, resource shortages and political instability. SRI firm Harrington has worked with the company on corporate governance issue for almost a decade.

The City of Pontiac General Employees’ Retirement System, represented by securities class-action specialists Robbins Geller Rudman & Dowd, has defeated a Wal-Mart Stores motion to dismiss a securities case against it arising out of an alleged Mexico bribery scandal. In denying the motion, Judge Susan Hickey of the US District Court for the Western District of Arkansas said the amended complaint sufficiently alleged that during the time of alleged unlawful conduct the defendants’ statements and omissions were materially false and misleading and made with the requisite knowledge and recklessness.