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RI ESG Briefing, September 4: MSCI adds to ESG offering with carbon and governance metrics

The round-up of environmental, social and governance news

Environmental

Index and ESG firm MSCI has launched a set of carbon and fossil fuel metrics and screening tools designed to help institutional investors understand, measure, and manage portfolio exposure to carbon-related risks. MSCI ESG CarbonMetrics provides oil and gas reserves and potential emissions data along with direct and indirect carbon emissions (Scope 1 and 2, respectively) for approximately 9,000 issuers in the MSCI ACWI Investable Market Index. Separately, MSCI has unveiled the first fruits of its recent $15m acquisition of governance research firm GMI Ratings with the launch of the GovernanceMetrics offering as a module on its MSCI ESG Manager online platform.

The European Investment Bank (EIB) has issued a new €500m Climate Awareness Bond. It takes the bank’s total climate bond issuance to €6bn and had a coupon, or interest rate, of 1.25%. The joint bookrunners were Credit Agricole CIB, DZ Bank, Rabobank and Raiffeisen Bank International. Asset managers, insurance companies and pension funds with a socially responsible investment focus bought 63% of the bond (ACTIAM, Aegon, APG, APK Pensionskasse, Natixis AM).

Norfund, the $1.6bn Norwegian Investment Fund for Developing Countries, has signed an agreement with solar power firm Scatec Solar to invest in solar power projects to be developed in all countries within Norfund’s mandate. Scatec will hold 70% of the joint investment company, with Norfund holding the remaining 30%. Scatec and Norfund have been partners in four solar PV projects in Africa totaling 200MW (three in South Africa and one in Rwanda). The partnership will provide a framework for collaborative project development, they said.

Social

Nine large Dutch pension funds – among them ABP, PFZW, PME and PMT – have invested in food companies in Thailand, China and Brazil which rely on battery cages to house livestock, according to a study in Dutch by NGO Wakker Dier. According to the study, the nine schemes invested around €170m in such companies between 2010 and 2013. Since 2012, the use of battery cages has been banned in the Netherlands as well as the rest of the EU. A spokesman for ABP, the €325bn Dutch civil servant scheme, dismissed the findings, insisting that the scheme’s food investments met national and international standards for livestock.

Business intelligence firm RepRisk has teamed up with US impact investing platform Mission Markets to provide the latter’s investors with comprehensive ESG business intelligence. RepRisk’s ESG data and metrics will be integrated into Mission Markets’ impact investing platform. Financial terms of the deal weren’t disclosed.h6. Governance

Leading Australian super funds AustralianSuper and UniSuper have said the super industry will become more vocal in holding listed companies to account, according to a Bloomberg report citing senior executives at both funds. Bloomberg, quoting UniSuper’s Chief Investment Officer John Pearce and AustralianSuper’s Investment Manager for Governance Andrew Gray, said it comes as assets are increasingly being managed in-house “filling a void of shareholder activism in the nation”.

Shareholder advisory group PIRC recommended investors reject Betfair’s report and accounts at the online gambling firm’s annual general meeting today (September 4). PIRC said shareholders have been asked in prior years “to vote on the payment of dividends that in fact were illegal due to defective accounts”. But the company accused PIRC of “materially misrepresenting” the facts. Ahead of the vote, the giant Florida State Board of Administration, according to voting disclosures, voted against the company’s remuneration report.

The Global Corporate Governance Colloquia will bring together “the best research” on corporate governance each year at a series of conferences worldwide. “These conferences will attract invited and contributed research papers of the highest scholarly quality,” the organisers say, adding the total number of participants at each conference will be kept to 75 or less. The launch conference will be held at Stanford University in June 2015. Link

A lawsuit filed by Florida’s City of Plantation Police Officers’ Employees’ Retirement System has reportedly prompted Abercrombie & Fitch into making a series of governance changes. The fashion company’s board agreed to the changes to resolve the fund’s lawsuit objecting to the award of more than $140m in pay over seven years to longtime CEO Michael Jeffries, Reuters reported. Abercrombie also agreed to appoint a chief ethics and compliance officer and link executive pay more closely to performance. The plaintiff fund was represented by law firm Bernstein, Litowitz, Berger & Grossmann.

Danish pension fund administrator PKA, which last month fully acquired embattled tyre recycler Genan to protect its DKK1.1bn (€147m) investment in the firm, insists that it had no idea of Genan’s financial troubles. “All of Genan’s accounts were endorsed by Deloitte, which is a reputable company and one that PKA itself uses,” said Michael Nelleman Pedersen, PKA’s CIO who has been a board director at Genan since 2008 when the administrator became a 48% shareholder in the firm. Link (Danish)

Drilling services group Halliburton has agreed to pay almost $1.1bn to settle most private plaintiffs’ claims against it for its role in the 2010 Deepwater Horizon disaster in the Gulf of Mexico, according to a New York Times report. The cash will go to the thousands of businesses, individuals and local governments that suffered losses from the explosion.