RI ESG Briefing, April 18: Faith investors engage on listing rules for mining companies

Environmental

Trillium Asset Management, the US sustainable fund firm, has published an open letter to shareholders in New York-listed Spectra Energy, the Houston-based natural gas operator, seeking support for its resolution calling on the company to report on how it is “measuring, mitigating, and disclosing” methane emissions. The letter, signed by Natasha Lamb, Vice president of Shareholder Advocacy, adds that proxy-voting firm Institutional Shareholder Services (ISS) has recommended a vote in favour of the proposal.

Corporate ‘externalities’ such as greenhouse gas emissions, air pollution-related health costs and depletion of natural resources such as carbon storage by forests, are costing the global economy $4.7trn a year, according to a report by Trucost for the TEEB for Business Coalition. The report, “Natural Capital at Risk – The Top 100 Externalities of Business”, says companies and investors face an opportunity of growing consumer demand, especially in emerging markets, set against a backdrop of increasing resource scarcity and the degradation of natural ecosystems. It says a major challenge will be to understand the value of the ‘natural capital’. Link

China-based solar wafer maker LDK has partially defaulted on a $23.8m bond, almost a month after rival firm Suntech defaulted on $541m, China Daily reported. LDK said cash-flow shortages meant it was not able to make full payments to the holders of 4.75% senior notes due in 2013.

Social

A group of leading investors, companies, campaign groups, industry associations and trade unions have written to US Secretary of State John Kerry calling on him to place Uzbekistan in Tier 3 in the 2013 Global Trafficking in Persons Report over forced labour in the cotton industry. Investor signatories include Boston Common Asset Management, Calvert Investments, the Korea Sustainability Investing Forum, Mercy Investment Services, Pax World, the Sisters of St. Francis and Walden Asset Management.

The US SIF Foundation, the US body, has launched the Center for Sustainable Investment Education and the Center’s inaugural online course, Fundamentals of Sustainable and Responsible Investment. It is believed to be the first online course on sustainable investment for financial advisors and other investment professionals to be launched in the US. Link. Governance

The Ecumenical Council for Corporate Responsibility, the faith-based investor group, is a signatory to a letter to Martin Wheatley, the head of the UK’s new financial regulator the Financial Conduct Authority that has been organised by campaign group the London Mining Network. The group wants the FCA to use its powers to ensure that UK-listed mining companies are strictly regulated and adhere to the law of the UK and the countries in which they operate. “We hope that you will use such powers as the FCA has to ensure that UK stock exchanges do not continue to act as a haven for those mining companies whose human rights and environmental records leave so much to be desired,” the letter states.

Around a third of shareholder votes rejected the pay proposal at Telecom Italia’s annual meeting in Milan this week, according to a Reuters report. Despite protests from retail investors, the meeting approved the company’s financial results with a 98.7% majority.

Frankfurt-based asset manager Union Investment, which represents 4m shareholders in RWE, has voted against the appointment of industrialist Hans-Peter Keitel to the energy giant’s supervisory board. Speaking at RWE’s annual meeting in Essen today (April 18), Union portfolio manager Ingo Speich said the investor couldn’t support the appointment as Keitel already sat on the boards of seven other firms. “Mr Keitel, you should consider reducing the number of board seats you have. One cannot have one’s cake and eat it too!” declared Speich, who heads Union’s engagement and proxy voting operations. Keitel is a former CEO at construction giant Hochtief and former president of the industry association BDI.

US institutional investors have won $500m as part of a financial crisis-related class action suit brought against Countrywide Financial Corporation. Lead plaintiffs included the State of Vermont’s Employee Pension Funds, the Pension Trust Fund for Operating Engineers, the Maine State Retirement System and Washington State Plumbing & Pipefitting Pension Trust. The settlement is the largest ever mortgage-backed securities (MBS) class action recovery, said law firm Robbins Geller Rudman & Dowd. The plaintiffs had accused Countrywide, which was subsequently acquired by Bank of America, of making false claims regarding the quality of loans underlying billions of dollars of MBS.

An amended lawsuit brought by the Pennsylvania Public School Employees’ Retirement System against former senior executive at the Bank of America relating to the financial crisis has been revived, according to reports.