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.

Get RSS feed of these results

All components of this story

Company non-response
17 September 2018

Government Pension Investment Fund Japan 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

Norges Bank Investment Management response

Full response sent via email

We do not recognise the numbers you are referring to. This is also conveyed to Inclusive Development, without getting any further input to their methods or calculations. According to our public holding list you will find that we own only two of the companies that own the plants/projects you refer to, and that the corresponding holdings are much lower that the number you refer to.

https://www.nbim.no/en/the-fund/holdings/holdings-as-at-31.12.2017/?fullsize=true

The Ministry of Finance has issued specific Guidelines for Observation and Exclusion from the Government Pension Fund Global, based on criteria endorsed by the Storting – the Norwegian parliament.

On 1 February 2016, the Ministry of Finance added two new criteria to the Guidelines for Observation and Exclusion: a conduct-based climate criterion and a product-based coal criterion. For the coal criterion, the Executive Board of Norges Bank is responsible for excluding companies without a prior recommendation from the Council on Ethics. The coal criterion means that observation or exclusion may be decided for two categories of companies. The first category relates to mining companies that derive 30 percent or more of their income from extraction of thermal coal. The second relates to power producers that derive 30 percent or more of their income from power production, and where 30 percent or more of their power production is based on thermal coal. We will then assess the company’s future product and fuel mix transition and, for power producers, the share of renewables in company power generation, before companies are recommended for exclusion or observation.

 In 2017, we continued our work related to this criterion and made public the third tranche of coal exclusions. This resulted in Norges Bank excluding ten companies in 2017 and putting two under observation. In addition, we also performed a full review of all companies placed under observation in 2016 in order to assess the status of their business plans.

 For more information please read our report on Responsible Investment:

https://www.nbim.no/contentassets/67c692a171fa450ca6e3e1e3a7793311/responsible-investment-2017---government-pension-fund-global.pdf and the list of excluded companies on the web: https://www.nbim.no/en/responsibility/exclusion-of-companies/

Company non-response
17 September 2018

Nuveen 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

Oregon Public Employees Retirement System 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

Pensions Myndigheten -Sweden

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

PGGM Vermogensbeheer BV response

"The three companies mentioned in your cover mail that make up the $35 million investment – Ayala Corp., Marubeni Corp., and Toyota Tsusho Corp. – are part of the passively managed global equity index portfolio. These, as you mention, are conglomerates with some coal activities in the Philippines. However, they are also active in renewable energy, which, as far as we understand, is a growing line of business for these companies. We believe the companies have a role to play in the energy transition from coal and other fossil fuels to renewable energy. Through our engagement with carbon-intensive companies, we strive to move them towards this goal more quickly. However, because of limited resources, we have to prioritize our engagement . For this, we use data and research from external engagement providers. According to these providers, the ESG ratings of the three companies are at an average level, and as a result, the companies do not come up as targets for engagement. This is also true for our external engagement provider GES that focuses on engagement with companies that have violated the OECD Guidelines for Multinational Enterprises or UN Guiding Principles on Business and Human Rights.

"At present, we have no intentions to exclude the companies from our portfolio. Selling our investments merely changes ownership of the companies, but doesn't bring the necessary change. Still, we appreciate the in-depth research detailed in the report and will take it into consideration, as it adds to further shaping our position on the energy sector and the energy transition."

Download the full document here

Company non-response
17 September 2018

State of Wisconsin Investment Board

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

Texas Permanent School Fund 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

Vanguard 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.

Article
17 September 2018

Philippines: Report divulges World Bank and international investors supporting coal projects; alleges threats to environment & human rights defenders

Author: Inclusive Development International

"World Bank and International Investors Bankrolling Climate Disaster in the Philippines," 18 April 2018

International investors have...poured billions of dollars into coal-fired power plants in the Philippines, one of the world’s most vulnerable countries to climate change. The World Bank Group, commercial banks and asset managers have quietly bankrolled a coal boom on the island nation despite many of them pledging to end or cut their funding for fossil fuels, according to a report released today by Inclusive Development International, Bank Information Center Europe and the Philippine Movement for Climate Justice.

The report, “Broken Promises: The World Bank, International Investors and the Fight for Climate Justice in the Philippines,” details how investors have helped prop up coal in the Philippines despite strong public opposition and local market conditions that favor clean energy. International investors face enormous financial risk, with experts predicting some $21 billion in stranded coal assets in the Philippines in the coming years.

The boom in new carbon-polluting coal plants in the Philippines threatens to derail international efforts to limit global temperature rise to below 1.5°C above pre-industrial levels...In addition to making the Philippines even more vulnerable to climate change, the coal projects havecaused forced displacement and dangerous air and water pollution, among other impacts. Environmental defenders opposing the projects have been threatened, harassed and even murdered...

 

Read the full post here