RI ESG Briefing, September 6; EIB, GIIN, conflict minerals

The RI round-up of environmental, social and governance news.


The European Investment Bank (EIB) is appraising a £125m (€157m) loan to help support the UK’s government’s “Green Deal” initiative. The Green Deal helps with energy-saving improvements to homes and business such as insulation, heating and renewable energy technologies. The EIB would make the loan to the Green Deal Finance Company, a special-purpose financial vehicle designed to source the funds necessary to support the Green Deal from a range of public and private investors.

German private bank M.M. Warburg has unveiled a balanced fund that invests in three asset classes, namely stocks traded on a sustainable index developed by J. Safra Sarasin, German bonds and gold. Along with packaging the fund, Warburg is distributing it to both retail and institutional investors. The fund’s advisor is Rheinische Portfolio Management, a Cologne-based asset management boutique that specialises in investments for institutions like insurers and banks. According to Warburg, the fund, called “transparente Invest” begins with a target allocation of 70% German bonds, 10% gold and 20% stock. The management fee for retail shares of the fund is 1.5% and for institutional shares 0.75%.

Renewable energy sources in the US accounted for nearly 50% of the electric capacity added in 2012, according to a new report. Wind deployment added a record 13,124MW of capacity, and solar added 3,313MW, according to the latest edition of the Ernst & Young report on U.S. renewable energy attractiveness indices. The report highlights trends in US renewable investment and ranks the states in terms of their attractiveness for clean technology investment. Link

Biomass power generation worldwide will reach $11.5bn in annual revenue by 2020, according to a recent report from Navigant Research. The report, Market Data: Biomass Power Generation provides capacity and revenue forecasts, market sizing, and market share analysis for electricity production from biomass, covering dedicated/co-fired, anaerobic digestion, and biorefinery facilities. Link

Investec has reportedly closed its energy development business in Australia, which invested in a number of renewables projects including wind farms and major solar installations. The South African bank is understood to have laid off or redeployed up to 100 staff.


The newly launched Social Stock Exchange, a UK site connecting investors with companies making a positive social impact, is planning to grow internationally, according to a report in the Financial Times citing the project’s head, Pradeep Jethi. He told the FT the exchange is in talks with several overseas companies about joining the platform, including companies listed on Nasdaq, NYSE Euronext and Deutsche Börse. He aims to increase the membership to 20 companies by year-end, the FT added.

Scott Stringer, one of the candidates to become New York City Comptroller, has reportedly promised to prioritize sustainable investment practices for the city’s $140bn pension funds. Stringer, currently the president of Manhattan Borough, would establish the Office of Sustainability Management within the Comptroller’s Officer to “ensure that the City operates, invests, and spends in environmentally sustainable ways to save taxpayer money and improve government performance”, according to aiCIO, which cited campaign documents.The Global Challenges Index (GCX), a German sustainable equity index run by the Hanover stock exchange and German ESG research firm oekom, has outperformed the benchmarks Dax, MSCI World and EuroStoxx in the six years of its existence, the exchange said. Hanover’s bourse said that since GCX was launched on September 3, 2007, it has gained 29.5%. By comparison, the German Dax index and the MSCI World, put on just 8.9% and 17.1%, respectively, during the period. The EuroStoxx performed even worse, losing 20.5%, the bourse said. Since its inception, the 50-member GCX has attracted €129m from investors, much of which has come from German institutions.

Conflict minerals: NGO’s, the Responsible Sourcing Network and the Enough Project have released a paper, which they say outlines expectations by sustainable and responsible investors and human rights advocates for the contents of the inaugural reports on conflict minerals required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Companies are currently preparing their first required reports on conflict mineral use to the U.S. Securities and Exchange Commission, (SEC). The report, is titled: Expectations for Companies’ Conflict Minerals Reporting can be accessed here

The Global Impact Investing Network (GIIN) has released Getting Started with IRIS, a guide to help impact investors select and apply social, environmental, and financial performance metrics from the IRIS catalogue of more than 400 generally-accepted performance metrics used for measuring the development impact of investment in agriculture, energy, health, and financial services.


A bill to encourage “equitable and diverse” gender representation on corporate boards has passed at the California State Senate. The so-called Resolution 62, introduced by Senator Hannah-Beth Jackson, urges that, within a three-year period from January 2014 to December 2016, inclusive, every publicly held corporation in California with nine or more director seats have a minimum of three women on its board. Text

Engaged Capital, the new activist boutique founded by former Relational Investors MD Glenn Welling and which has ties with pension fund-backed Governance for Owners, has written to the board of drone maker AeroVironment. Engaged Capital owns around 5.1% of the California-based company and says it is disappointed with its “unwillingness to enter into a constructive process” or consider its independent director nominee as well as its “failure to provide proper governance and protections for the rights of its shareholders”.

Brazilian exchange BM&FBOVESPA says the number of listed companies which publish a sustainability report, or explain why not, rose from 203 to 293 between May 2012 and June 2013. This is an increase from 45% to 66% of companies that are now in the ‘Report or Explain’ voluntary initiative launched in December 2011. The exchange said the number of companies that effectively published social, environmental and corporate governance information rose by 61, from 96 to 157, “evidencing publicly-traded companies’ growing commitment to and appreciation of the sustainability agenda”. Link

Four US healthcare companies – Baxter International, Eli Lilly, Merck & Co. and Pfizer – will be admitted to the Calvert Social Index Universe after a review. Baxter, Eli Lilly and Pfizer have shown improved product marketing disclosure and performance. Merck has demonstrated “improved product safety, governance and ethics disclosure and performance”.