Philippines: Report alleges 'opaque investments' in coal projects that are causing environmental & social harms; some investors respond

The report, "Broken Promises: The World Bank, International Investors and the Fight for Climate Justice in the Philippines," raises serious allegations concerning various companies' support of coal power plan projects in the Philippines through 'opaque' investments' that are causing 1) derailment of international efforts to limit global temperature, 2) forcible displacement of people living near plant sites, 3) dangerous air and water pollution, and 4) threats, harassment, and even murder of environmental defenders.

Business & Human Rights Resource Centre invited 19 investor-companies to respond. These were: 1) Alaska Permanent Fund 2) APG Asset Management 3) AMF Pensionsforsakring AB 4) BlackRock 5) British Columbia Management 6) Caisse de Depot et Placement du Quebec 7) Canada Pension Plan Investment Board 8) Forsta AP-Fonden 9)  Pensions Myndigheten-Sweden 10) Government Pension Investment Fund of Japan 11) Norges Bank Investment Management12) Nuveen LLC 13) Oregon Public Employees Retirement System 14) PGGM Vermogensbeheer B.V. 15) CalPERS 16) State of Wisconsin Investment Board 17) Texas Permanent School Fund 18) Vanguard Group, and Cathay United. 

The following investor-companies sent responses and these are linked below: APG Asset Management, Cathay United, AMF Pensionsforsakring AB, Canada Pension Plan Investment Board, and Norges Bank Investment Management. The other investor-companies did not respond.

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Company non-response
17 September 2018

Alaska Permanent Fund Corp did not respond

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.

Company response
17 September 2018

AMF Pensionsforsakring AB response

"AMF's starting point for working with sustainability in asset management is that we believe that companies that work actively with sustainability issues are in a better position to create long-term good returns. We also recognize the role of the financial sector in the transition towards lower carbon emission and a more sustainable use of resources. We have read the report with great interest, and met with the organization BIC Europe in June 2018 to discuss the findings. We have also informed our provider of ESG-analysis of the report, to ensure that the issues raised are included in the ESG screening process of our investments."

Company response
17 September 2018

APG Asset Management response

We welcome the research by Inclusive Development International about our coal-fired power sector in the Philippines.  The research findings feed into our analysis and serve as input for our further inquiry and potentially engagement with the companies and/or other actions.

 

As a large pension investor, we believe in good pensions in a sustainable world. Thus, we have set ambitious targets for 2020, such as having EUR 58bn of investments that contribute to the United Nations’ Sustainable Development Goals. Today we have already 50 billion in SDGs. At the same time, we reduced the CO2-footprint for the listed equity portfolio by 28%.

Download the full document here

Company non-response
17 September 2018

BlackRock did not respond

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.

Company non-response
17 September 2018

British Columbia Investment Management Corp. did not respond

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.

Company non-response
17 September 2018

Caisse de Depot et Placement du Quebec did not respond

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.

Company non-response
17 September 2018

CalPERS did not respond

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.

Company response
17 September 2018

Canada Pension Plan Investment Board response

Full response sent via email:

Thank you for providing us with the opportunity to respond to this report, which contains incorrect information about our financial holdings.

 In March, the author of this report contacted us. He said the organization had calculated our holdings in the public companies that own these power generation plants and estimated it was $279.95 million. We wrote on April 3 to make clear this grossly overstates CPPIB’s investment. Based on our initial review using the criteria provided, we explained that our equity exposure to these companies was C$57.2 million as of March 31, 2017.

The author then asked for further clarification on the difference between the two values. We replied noting issues with the market prices and categories of shares used, pointing to the list of CPPIB’s Foreign Publicly-Traded Equity Holdings that we disclose annually on our website.

 At CPPIB, we work to ensure that environmental, social and governance (ESG) risks and opportunities are incorporated into our investment decision-making and asset management activities. As an investor, we monitor ESG factors and actively engage with companies to promote improved management of ESG issues, ultimately leading to enhanced long-term outcomes. Climate change and Human Rights are two of our ESG focus areas. You can find further details on our approach at this link:

http://www.cppib.com/en/how-we-invest/sustainable-investing/investing-reports/#/engagement

Thank you again for taking the time to contact us on this issue, and allowing us to set the record straight with the correct information.

Company response
17 September 2018

Cathay United response

Full response sent via email

 

Thank you for taking time to express your concern on the management of financial institutions in terms of the Coal-fired Power Industry in the Philippines. Cathay United Bank Co., Ltd. (hereinafter as “CUB”, “we” or the “Bank”) is aware of relevant issues in sensitive industries such as environmental and social issues in the Coal-fired Power Industry mentioned in your mail. The Bank has always dedicated efforts in integrating environmental and social sustainability as part of the core banking competencies as ESG factors are incorporated as part of the Bank’s credit approval processes. CUB strives to be a strong performer in sustainability among fellow financial institutions and continuously contributes to the bigger picture by doing the right things.

 

Again, CUB appreciates your faith and efforts on promoting a healthier environment as well as a stable society. We are fully aware of the role that financial institutions shall take for the purpose of ESG, and we are always working on excelling market expectations. For that, your valuable inspiration and feedback in the future is certainly welcomed.

 

Company non-response
17 September 2018

Forsta AP-Fonden

Business & Human Rights Resource Centre invited the company to respond to the allegations in the report. It did not send a response.