RI ESG Briefing, Jan. 27: Siemens facing questions at AGM over fracking equipment

The round-up of the latest environmental, social and governance news

Environmental

The Canadian province of Saskatchewan is likely to tighten rules for buying farmland – to stem further purchases from institutional investors like the C$234bn (€165.9bn) Canada Pension Plan Investment Board (CPPIB), Reuters reports. Agriculture Minister Lyle Stewart was quoted saying it was needed to prevent local farmers being priced out of the market. The CPPIB’s last purchase of Saskatchewan farmland, which has appreciated greatly in value recently, was in 2013, when it bought 115,000 acres.

The University of Maine System Board of Trustees voted on January 26 to divest all direct holdings from coal companies, while Marrickville Council in the inner west of Sydney became the first council this week in New South Wales to commit to fossil fuel divestment, following the moves of Moreland Council in Melbourne and Fremantle Council in Western Australia. Elsewhere, US faith group the Sojourners also committed to fossil fuel divestment this month.

The World Bank’s IFC arm has teamed up with the Government of Canada and the US’s Overseas Private Investment Corporation and BMR Jamaica Wind Ltd. to build, operate and maintain a 36.3MW wind farm about 90 km west of the capital, Kingston. It will be the largest renewable energy project developed by the private sector in Jamaica, they said. The US$62.7m financing package consists of a $42.7m senior loan from OPIC, a US$10m senior loan from IFC’s own account, and a US$10m loan from the IFC-Canada Climate Change Program. Link

Santander Global Banking and Markets and Bayerische Landesbank have financed the construction of five large UK solar farms by renewables firms SunEdison and TerraForm Power, according to reports. The plants will generate 85.2MW and produce power for 26,000 homes. Santander and Bayerische Landesbank each provided a two-year £35m bridge (€46.7m) loan for the project, due to be completed in the first quarter of this year.

Social

Consumer goods giant Unilever is reportedly considering becoming the second listed company to achieve B Corp status – i.e. a for-profit corporate entity that commits to positive social and environmental goals. The Guardian quoted CEO Paul Polman as saying at the Davos event that the company is considering pursuing the status. Brazilian cosmetics, fragrance and toiletries firm Natura became the first listed firm to attain B Corp certification last month. B Corps are certified by the B Labs group, and its co-founder Jay Coen Gilbert added the lack of resistance from Natura’s institutional investors helped the process.

EMPEA, the Emerging Markets Private Equity Association, and the Wharton School of the University of Pennsylvania, have announced a partnership to expand Wharton’s impact investing performance database. It is part of the Wharton Social Impact Initiative that houses the Impact Investing Performance Database. Impact fund managers are encouraged to join the current data gathering cycle by February 28. Link. Governance

Union Investment and Deutsche Asset and Wealth Management (DeAWM), two big shareholders in Siemens, have taken issue with the German tech giant’s recent purchase of Dresser-Rand, a Texas-based firm that provides equipment for fracking. In speeches set to be given at Siemens’ annual meeting in Munich today (January 27), Ingo Speich, Head of Union’s proxy operations and Henning Gebhardt, Head of Equities at DeAWM, asked Chief Executive Joe Käser if he’s aware of the environmental risks and what the firm will do in the case of environmental damage. Shareholders were also voting on proposals from the Association of Critical Shareholders (DKAA) denying the firm’s management and board discharge because of the acquisition and Siemens’ involvement with the controversial Belo Monte Brazilian dam. Link

Norway’s NOK6.7trn (€764bn) Government Pension Fund, its sovereign wealth fund, has reportedly exited three companies over concerns about their environmental, ethical and human rights records. Advisory panel, the Council of Ethics, said in its annual report for 2014 that Tahoe Resources, Innophos Holdings and Noble Group had been recommended for exclusion from the giant fund’s investment universe, IPE.com reported.

The US Council of Institutional Investors (CII), which represents investors with around $3trn in assets, is holding a teleconference on international corporate tax policy on February 5 to be moderated by Anne Simpson, senior portfolio manager & director of global governance at CalPERS. A confirmed speaker is Meryam Omi, head of sustainability at Legal & General Investment Management. L&G is also part of a UK investor group working on taxation with Rathbone Greenbank Investments, the Church Commissioners and Royal London Asset Management that is also holding a webinar set to be hosted by the Principles for Responsible Investment (PRI).

Dutch pension investment giant PGGM and UK railways investor Railpen have written to the board of Oracle as part of a long-running governance dispute with the US software company. They have reiterated their concerns that company founder Larry Ellison owns 26% of outstanding shares and complain that their requests for dialogue are continually ignored, calling it an “untenable barrier” for shareholders to communicate directly with the board. They call for proxy access, a compensation structure that shareholders can support and a policy allowing shareholders to communicate effectively with the board. Link

US retirement services giant TIAACREF and the $159bn (€141.5bn) New York City Retirement System have decided to join a lawsuit against a US real estate investment trust (REIT), stating that they too were victims of an accounting fraud at the firm. According to the news portal Chief Investment Officer (CIO), two Ohio public pension funds decided to sue American Realty Capital Properties (ACRP) for doctoring its financial results last October.

The Swedish Shareholders’ Association, which works for retail investors, has called for an independent examination in the wake of the major reshuffle at the top of Swedish business over a corporate jet perks scandal. The body is headed by Carl Rosen, the former Executive Director of the International Corporate Governance Network (ICGN) and Head of Corporate Governance at Swedish state fund Andra AP-fonden (AP2).

New York City Comptroller Scott Stringer has announced a victory for his Boardroom Accountability Project, which campaigns against “zombie” boards. He tweeted that US discount retailer Big Lots has agreed to enact a proposal for shareholder nomination of board members. Stringer has filed 75 so-called “proxy access” proposal at companies as part of his campaign.