RI ESG Briefing, April 10: New methodology developed for FTSE4Good

The round-up of ESG news


Two new green bonds have been issued. US solar firm SolarCity has issued a $70.2m, eight-year issue based on cash flows from residential solar installations, said advocacy group the Climate Bonds Initiative. And Spanish utility firm Iberdrola has followed France’s EDF in becoming the second European utility to issue a green bond. It has raised €750m for renewable energy and smart metering projects.

Major companies such as Nestle and General Mills have committed to the Alliance for Water Stewardship (AWS), alongside NGOs such as WaterAid and WWF. It comes as AWS has released the first International Water Stewardship Standard 1.0, a global framework to promote sustainable freshwater use.

The UK’s Green Investment Bank has become a signatory to the Principles for Responsible Investment initiative. “Most of the PRI obligations are already part of our investment policies, but we are keen to see what we can do to go beyond this and share best practice with other responsible investors around the world,” said CEO Shaun Kingsbury.


Index firm FTSE says it has developed a new research methodology for the FTSE4Good Index, the 13-year-old series, and its ESG Ratings. It has also announced plans to launch “a variety of new ESG services”. In future, FTSE will be taking full responsibility and control of the research process for the FTSE4Good Series and ESG Ratings, with companies being assessed against 14 ESG themes, covering over 300 specific indicators. FTSE will also be creating an extended range of ESG index and data analytics services.

The PRI Academic Network has made a call for papers for its seventh annual conference to be held 22-24 September 2014 at the Hilton Montréal Bonaventure. The event is being co-hosted by the David O’Brien Centre for Sustainable Enterprise at Concordia University and Carleton University’s 3ci.

Timothy Wirth, a former Harvard Overseer and U.S. Senator from Colorado, has written an open letter to Harvard President Drew Faust in The Harvard Crimson, the university newspaper, challenging the decision not to consider some form of divestment from fossil fuel companies in favour of an engagement approach. Wirth, President of the United Nations Foundation, questions the scientific, moral and practical basis for Harvard’s decision. It comes as Harvard has become a signatory to the Principles for Responsible Investment (PRI).

South Africa’s R90bn (€6bn) Eskom Pension and Provident Fund has reportedly committed R100m to International Housing Solutions (IHS), a private equity fund that finances affordable housing in the country, where there is an estimated backlog of up to 2.5m units. EPPF Chief Executive Sibusiso Luthuli said the investment would not only help to improve living standards, but also lead to a decent return for the scheme.h6. Governance

New York City Comptroller Scott Stringer, on behalf of the New York City Pension Funds, has written to 20 of the funds’ largest holdings, including big names such as Apple, Pfizer, Oracle, and American Express, asking them to disclose performance figures on their supplier diversity programs. While 90% of S&P 100 companies have supplier diversity programs, less than half of them disclose data on performance, Stringer says.

Union Investment, the Frankfurt asset manager which owns 0.9% of auto giant Daimler AG, said it would vote against the appointment of Joe Käser, tech firm Siemens’ chief executive, to Daimler’s supervisory board. Ingo Speich, Head of Engagement at Union, said Käser’s focus should be on running Siemens instead of serving at other companies. Speich reiterated his demand for Daimler to leave what he called scandal-plagued Formula 1 due to reputational risk. Speich also asked Daimler’s Board if it could rule out human rights violations in its supply chain, given the prevalence of conflict minerals in electronics.

Proxinvest, the French shareholder voting advisory service, has reportedly recommended a no vote against the remuneration of George Plassat, Chief Executive of French supermarket giant Carrefour at its April 15 AGM. Proxinvest said that the CEO’s variable pay package had still not been communicated to shareholders. Proxinvest has also recommended a vote against a resolution that would increase the maximum age of the CEO to 70 from 65 to allow Plassat to continue in the post. It said the proposal should be for an exceptional not permanent age change for the position.

The Principles for Responsible Investment (PRI) has launched a new 36-page guide to assist with the integration of environmental, social and governance (ESG) factors within private equity. It is called Integrating ESG in private equity – a guide for general partners. Tim van der Weide at PGGM and Chair of the PRI’s Private Equity Steering Committee stated: “The guide can also help limited partners (LPs) to understand the different ESG integration practices currently being implemented in the market.”

The PRI has also released the results from a recent engagement and satisfaction survey of its 1,200 signatories. More than 360 signatories responded to the survey which found that 75% would recommend the benefits of being a PRI signatory to other similar organisations. Link

The Australian exchange ASX has released an independent report measuring listed companies’ adoption of its Corporate Governance Council’s gender diversity recommendations. In the second full year of reporting on diversity, the research found that the benefits of diversity are now well recognised and articulated by listed entities. The report was conducted by KPMG and analysed compliance by 600 ASX-listed companies.