Bond vigilante calls out credit investors on climate

first_img For reprint and licensing requests for this article, click here,MOST READ 2 Separately, Erlandsson slammed London-based HSBC in an open letter that was published by ESG news site Responsible Investor for “failing to engage” with the State Bank of India over the Carmichael financing, since it was one of the lead underwriters of the Indian lender’s green bond.In another instance, Erlandsson called out state-owned Japan Bank for International Cooperation for financing a coal plant in Vietnam. He criticized the bank’s lenders, HSBC and Barclays, for not disclosing the obvious climate risks to bond investors. Just two months after Erlandsson suggested investors blacklist it, the Japanese bank said in March that it had no plans to finance any new coal-power projects.Officials at HSBC and Barclays declined to comment.In his anti-greenwashing fervor, Erlandsson risks missing the mark.Again writing in Responsible Investor, Erlandsson said in February that Adani Ports & Special Economic Zone Ltd., part of the Adani group, had unduly profited from understating climate risks in its disclosure to environmental nonprofit CDP. A few weeks later, CDP responded with an article in the same publication calling his note “both unhelpful and misleading to anyone involved in the business of encouraging markets to use ESG data to make better investment decisions.”Erlandsson got his first taste of how financial markets can impact climate change while working as a portfolio manager at Swedish pension fund AP4, where he was an early investor in green bonds.Having since concluded that shorting the debt of polluters has at least as much, if not more, impact than going long climate do-gooders, he’s spent the last several years trying to launch a climate-focused credit hedge fund. He said seed investors had pledged to back him,  but the fund management platform he planned to use decided at the onset of the Covid-19 pandemic that the operational and legal structures were too challenging for such a product.With that plan on ice, Erlandsson launched a research and advocacy firm with financial backing from the Growald Family Fund, a foundation set up by Rockefeller family members focused on climate change.Erlandsson’s Anthropocene Fixed Income Institute is a climate activist that speaks the language of financial markets. It publishes everything from technical research on relative-value climate trades using credit derivatives to opinions on how the European Central Bank should structure its bond purchases to avoid financing carbon emissions. It’s also his soapbox to expose anything that smells of greenwashing.While he loves to expose hypocrisy, such as a company selling bonds to fund green projects while also lending to planet-destroying projects, he understands that being too confrontational could undermine his efforts to encourage fixed-income managers to support the climate transition.“At some point you become too much of a troublemaker that people don’t even listen to you: You become some sort of a Cassandra or a Boy Who Cried Wolf,” said Erlandsson. “I don’t want to be perceived as a blue-eyed Scandinavian pointing fingers at everyone else.”[More: Climate activist takes aim at Vanguard] “I see a lot of stuff that’s just intellectually inconsistent,” Erlandsson said. “When people are saying they’re doing the right thing and they’re not, then it really irks me.”By the time he called Amundi, several of the investors he spoke to had already raised the issue with the money manager and threatened to sell their shares in the EGO fund unless Amundi either divested its stake in State Bank of India or persuaded the company to withdraw its planned loan. Within weeks Amundi sold its roughly $20 million bond holding.Joakim Blomqvist, head of fixed income and foreign exchange at Swedish pension fund AP3, was one of the EGO fund investors contacted by Erlandsson. Blomqvist said Erlandsson’s call triggered a number of events that ultimately led to Amundi’s divestment and that his lobbying of investors probably was instrumental in the French fund manager’s decision. A spokesman for Amundi declined to comment, while a spokesman for State Bank of India hasn’t responded to requests for comment. He pushed Amundi, Europe’s largest asset manager, into divesting bonds in an Indian bank that was financing a coal mine, shamed HSBC Holdings for failing to hold that same bank to account, and pressured a Japanese lender to announce it would stop funding coal power.Erlandsson sees his particular brand of activism, shaped by almost two decades working in the debt markets, as a new form of bond vigilantism. He now spends his time pushing fixed-income investors and bankers to face up to the risks posed by climate change and their role in underwriting a warmer planet. He wants them to use their financial heft to increase the cost of capital for polluters and pressure companies to reinvent themselves for a low-carbon future.After setting up a nonprofit last year backed by Rockefeller money, the former credit derivatives strategist at Barclays and bond fund manager has become an outspoken critic of the financial establishment, lambasting companies including his former employer Barclays for failing to do enough to fight global warming.His unconventional methods involve a combination of public shaming, typically on social media, and back-door diplomacy. Using contacts built up over years of buying and selling bonds, he cajoles and persuades investors or lenders to exit planet-warming positions. And he’s not bashful in enlisting lawyers, other nonprofits or journalists in his campaigns. He knows people see him as a troublemaker.“I have a low threshold for generating trouble when I see something that I think is wrong,” said Stockholm-based Erlandsson. “There’s a saying here that goes ‘only dead fish flow with the stream.’ I’m definitely not one of the dead fish.” 3 Why Tony Robbins, tax shelters and financial advisers don’t mix House committee poised to advance SECURE 2.0 retirement savings bill Pandemic accelerated investing based on ESG and climate goals Subscribe for original insights, commentary and analysis of the issues facing the financial advice community, from the InvestmentNews team. Late last year, Erlandsson, 45, learned that India’s largest bank, State Bank of India, planned to lend about $650 million to help Adani Enterprises fund a controversial coal mine in northern Australia. As an early investor in green bonds — debt raised to fund specific environmentally friendly projects — Erlandsson recalled that the Indian bank had sold such notes back in 2018. He also knew that one of the most high-profile funds investing in green bonds, Amundi’s Planet Emerging Green One fund, held the bonds.He jumped at the contradiction that a bank issuing bonds to finance wind and solar projects across India also was funding the high-polluting Carmichael mine in Australia. So he called investors in the EGO fund to flag the impending loan and remind them of the reputational risk for a green investor to be associated with the deal. 1 Newsletters 4 Ulf Erlandsson isn’t your typical climate campaigner: He prefers the trading desk to the picket line. 5 The Gates divorce: Lessons for financial advisers House panel unanimously passes SECURE 2.0 InvestCloud to acquire Advicent and NaviPlan planning softwarelast_img read more

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Foundations in place for SeaMade

first_imgDEME began the works in September 2019 using its offshore installation vessel Innovation.Turbine installation will start later this year. DEME will load the Siemens Gamesa Renewable Energy (SGRE) 8.4 MW turbines at the port of Ostend and install the units using its vessel Apollo.With a capacity of 487 MW, DEME said that SeaMade will be the largest offshore wind farm in Belgium. www.deme-group.comlast_img

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‘Direct action’ over cuts starts on Sunday, barristers announce

first_imgCriminal barristers will refuse to take new work from Sunday in protest at government cuts to the legal aid budget after 90% of survey respondents backed direct action, the Gazette can reveal.The Criminal Bar Association (CBA) said today (click the icon at the bottom of the article to read the full statement) that the decision was taken with ‘heavy hearts’ but that the situation was ‘desperate’.Over the past week the CBA surveyed members on whether there should be ‘action for justice’. According to today’s announcement, of 2,317 respondents, 2,081 voted in favour of action over a new formula for calculating legal aid fees for advocates. It marks the first time direct action has been taken since the ‘no new work and no returns’ action of 2014 and 2015.Angela Rafferty QC, CBA chair, said: ‘The system is desperate as are we. We are informing our members today that they should consider not taking any work from April 1, the implementation date of the reforms. We will hold days of actions. We will fight to improve the justice system for us and everyone else. We announce this action today with heavy hearts.’Barristers sets Garden Court Chambers, 25 Bedford Row and Doughty Street Chambers have all already indicated that they will support action.The CBA’s move comes after it emerged the House of Lords’ secondary legislation scrutiny committee had written to the Ministry of Justice seeking clarification on the revised Advocates Graduated Fee Scheme (AGFS), which determines how advocates are paid in legal aid cases. A government impact assessment claimed the changes would increase legal aid spending by an additional £9m per year but the Bar Council and the CBA say the reforms actually amount to a £2m cut.Rafferty added that, according to the Treasury’s own figures, the MoJ resource budget will fall by 9% over two years to £6bn by 2019/20.‘The budget for justice is now forecast to fall an initial £400m next year from £6.6bn in 2017/18 to £6.2bn in 2018/19, then to £6bn for 2019/20. Meanwhile the poor and vulnerable in society are being denied access to justice,’ she said. ‘The system is desperate; it cannot endure any more cuts.’The government has also cut the Litigators’ Graduated Fee Scheme, which remunerates solicitors. Earlier this week legal aid solicitors indicated that they would stand shoulder to shoulder with barristers, and today the Young Legal Aid Lawyers issued a statement of support.Law Society president Joe Egan said: ‘The action announced today by the Bar shines a light on wider concerns shared by lawyers that criminal legal aid services across England and Wales, and justice itself, are under threat.‘The same concern has led us to issue judicial review proceedings against cuts to fees for Crown Court work.’He added: ‘The rates paid to legal aid solicitors have not been increased since 1998 and the Law Society has consistently warned that the fragile criminal legal aid market cannot stand any further cuts. Despite this, the MoJ implemented further fee cuts in December 2017.’Shadow justice secretary Richard Burgon, said: ‘That lawyers feel they now must resort to taking action underlines the depths of this crisis. Labour has submitted a motion opposing the government’s planned changes to the criminal legal aid remuneration scheme and calling for any changes to be debated fully in parliament. More widely, the government must urgently step forward with investment to fix our broken justice system.’A Ministry of Justice spokesperson said: ‘We are extremely disappointed with the position the CBA has taken today, especially given that they and other members of the bar participated fully in the design of the scheme. Our reforms will reflect the actual work done in court, representing better value for the tax payer, and will replace an archaic scheme under which barristers were able to bill by pages of evidence.They added: ‘We greatly value the work of criminal advocates and will continue to engage with the bar moving forwards.’,Supporting documents Click link to download and view these files Statement by chair and vice chair of the barPDF, Size 0.34 mblast_img read more

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Munby: State ‘washed its hands’ of couple branded bigamists after court failures

first_imgFamously outspoken family judge Sir James Munby has berated the government over legal aid restrictions which left a divorced couple labelled as bigamists through no fault of their own.The retired family division president, sitting as a High Court judge in M v P (2019), said the state had ‘declined all responsibility’ for helping the parties despite ultimately landing them in this predicament.The couple had assumed their divorce was finalised by decree absolute in 2014 and each went on to marry again. But the process had been subject to fundamental errors by district judges who granted the decrees despite an administrative mistake on the petition which stated the couple had lived apart for two years. In fact they had actually only been married for 22 months, and the court was now required to decide whether the decree absolute was void or voidable.Munby said ‘serious mistakes’ were made by the court and by judges in not spotting and rectifying the original error, which was caused by one of the parties ticking the wrong box in the petition.  Sir James MunbySource: The TimesThe ‘human realities’, as Munby put it, were that not only might the couple have committed an offence, but in one case the wife had married a Brazilian national who might no longer be able to enter the UK.Munby ruled that the decrees were voidable and not void, partly due to there being no previous case to rely on, and partly due to the language and context of the legislation being discussed. Both remain valid and documents could be varied to reflect this.‘Parliament surely cannot have intended the injustice which will inevitably flow, not just to M and P but also to their new spouses, if the decrees are void,’ said Munby. He said the parties were the ‘innocent victims of failure by the court itself’ who had remarried in good faith and in reliance upon court orders.If judges were compelled to overturn such a court order then ‘surely the modern judicial conscience would revolt’, he added.Munby explained that P had been refused exceptional funding by the Legal Aid Agency on the basis she had an available net monthly income of £625.87 and her aggregate income exceeded the limit by £37. The idea these figures should justify her not receiving state aid was ‘unnourished by sense’, said the judge.Munby added: ‘What I was faced with here was the profoundly disturbing fact that P does not qualify for legal aid but manifestly lacks the financial resources to pay for legal representation in circumstances where, to speak plainly, it was unthinkable that she should have to face the Queen’s Proctor’s application without proper representation.‘The state has simply washed its hands of the problem, leaving the solution to the problem which the state itself has created to the goodwill, the charity, of the legal profession.’Munby reserved praise for the ‘professional dedication, commitment and sense of duty’ of Janet Bazley QC and Katherine Dunseath, instructed by Sundeep Budwal and Paul Nuttall of national firm Duncan Lewis, who represented the couple pro bono.But he added: ‘There is something profoundly distasteful when society, when government, relies upon this as an excuse for doing nothing, trusting to the professions to do the right thing which the state is so conspicuously unwilling to do or to provide for.’last_img read more

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Termination of Rift Valley Railways concession agreed

first_imgKENYA: The termination of Rift Valley Railways’ concession to operate the Kenyan section of the metre gauge Kenya – Uganda railway network has been agreed ‘by joint consent’ after the high court in Nairobi backed Kenya Railways’ attempts to end the contract.KR had sought to end the concession in the belief that RVR had not complied with the terms of the 25-year contract, which was signed in January 2006 and restructured in 2011. Discussions between RVR and KR had been underway since January this year in an attempt to resolve the dispute. The metre-gauge network also faces competition from the Chinese-backed Standard Gauge Railway which was inaugurated between Mombasa and Nairobi in May.‘RVR defaulted in its payment of concession fees, rent and other key performance indicators under the concession agreement’, KR Managing Director Atanas K Maina told local media. ‘The government will not be paying them anything since they are the ones in default.’Following the court’s decision, Maina and RVR Chief Executive Isaiah Okoth issued a joint statement on July 31 announcing the formation of a committee to engage with stakeholders to ensure service continuity and to manage the ‘seamless’ handover of operations and the concession’s assets. The handover was expected within 30 days. The majority shareholder in RVR is Qalaa Holdings, formerly known as Citadel Capital. The Egypt-based energy and infrastructure group has classified RVR as a discontinued operation since the first quarter of 2016, and said the transfer of the concession would therefore not have a negative impact on its consolidated financial statements. RVR said it wanted to assure employees, customers and stakeholders of its ‘commitment to ensure a smooth transition and continue operations’ as the process ‘moves forward to its logical conclusion.’last_img read more

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