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RI ESG Briefing, March 26: US Chamber sets out principles for proxy firms

The round-up of environmental, social and governance news

Environmental

The IFC, the World Bank’s private finance arm, has teamed up with Russia’s state-owned development bank to “develop new products” to address the growing demand among Russian companies for energy efficiency financing. IFC will also examine the energy savings potential of the bank’s portfolio, provide special training to bank staff on assessing energy efficiency projects, and support a marketing campaign to promote energy efficiency across Russia. Link

Aviva Investors and UK’s Green Investment Bank have said they will provide around £36m of funding for a new energy innovation centre at Addenbrooke’s Hospital in Cambridge, UK. The centre is designed to deliver substantial financial and carbon emissions savings for the hospital trust and is expected to be one of the largest projects of this type in the country.

German technology firm Robert Bosch is getting out of the solar power business after posting a huge loss for 2012. In a statement released late on Friday, Bosch said the development, production and marketing of photovoltaic (PV) equipment at facilities in Venissieux, France and Arnstadt, Germany would cease at the beginning of 2014. The shutdown could threaten 2,850 jobs. The division’s two managing directors have already stepped down. Bosch blamed the move on the huge overcapacity in the PV equipment industry.

New reports for Australasia’s Investor Group on Climate Change (IGCC) on the Mining and Minerals, Property and Construction and Oil and Gas sectors show increasing climate risks for investors. Reports also show that cost effective mitigation and adaptation opportunities are available. The reports were launched at the Conference of Major Superannuation Funds in Brisbane. Link

Social

A proposal by campaign group Investors Against Genocide at Franklin Resources, parent company of Franklin Templeton mutual funds, was voted on for the first time on March 13. It won 8.7% votes in favour. “Americans, once they become aware of this problem, do not want their pensions and family savings connected to genocide,” states Eric Cohen, chairperson of Investors Against Genocide.h6. Governance

US business group, the US Chamber of Commerce’s Center for Capital Markets Competiveness (CCMC) has released a set of principles seeking to create “transparency, accountability, and good governance” at proxy advisory firms which it says have become the “de-facto standard setter for corporate governance” in the US. “The system is broken and it is time to fix it,” said David Hirschmann, president and CEO of CCMC. “As the number and complexity of issues on the proxy has grown exponentially, proxy advisory firms have failed to develop open, clear and evidence based standard setting systems to help ensure the advice they provide strengthens corporate governance and shareholder value.” The firms were also “riddled with conflicts of interest and outdated processes”. The Chamber’s principles are called Best Practices and Core Principles for the Development, Dispensation, and Receipt of Proxy Advice.

The New York State Common Retirement Fund has succeeded in getting a shareholder resolution on political contributions at energy giant Anadarko Petroleum onto the company’s proxy agenda. “As long-term shareholders of Anadarko Petroleum, we support transparency and accountability in corporate spending on political activities,” the fund said, adding Anadarko has made $1.6m in political contributions since 2002. Anadarko, which holds its annual meeting on May 14, is advising shareholders to vote against the motion saying it adopted a Political and Public Engagement Policy in 2012. Anadarko proxy

Governance firm Deminor is planning legal action against Danish wind turbine maker Vestas, according to a report in Windpower Monthly. It comes after a proposal seeking an independent review at the company was rejected in an 89.5% vote by shareholders earlier this month.

The number of fraud class actions filed in the US against listed life sciences companies has risen dramatically, even as the total actions have fallen – according to a new report from legal firm Dechert. It found that in 2012, 27 different pharmaceutical, biotechnology and medical companies were sued 28 times for alleged securities fraud – up from 17 in 2011. Link

The $152.9bn New York State Common Retirement Fund has won approval from the Securities and Exchange Commission (SEC) to submit a shareholder proposal on Sudan business links at US industrial group Caterpillar Inc., according to Pension & Investments. The motion calls for the company “to ensure that its products not be sold to the government of Sudan or entities controlled by it” and report back to shareholders.