1 March 2016

EF BRIEFS: ESG disclosure, 1366, SolarCity, Ecofys and Generation Foundation

Seven stock exchanges commit to publish guidance on ESG disclosure

Nasdaq's Nordic and Baltic exchanges have committed to step up requirements for environmental, social and governance (ESG) disclosure

Exchanges in Stockholm, Helsinki, Copenhagen, Reykjavik, Tallinn, Riga and Vilnius have all pledged to produce guidance on non-financial reporting from listed companies by the end of the year.

The move is part of the UN's Sustainable Stock Exchanges initiative, which was founded in 2012. The seven Nasdaq Nordic and Baltic exchanges signed up to the campaign in November.

"With exchanges being an essential interface between issuers and investors, marketplaces like Nasdaq Nordic and Baltic exchanges have a critical role to play in the development of sustainable capital markets, by encouraging their issuers to provide investors with consistent, comparable ESG information‎," said Marissa Blankenship, senior ESG analyst at Allianz Global Investors, which engaged with the exchanges ahead of their pledges.


1366 mulls IPO as it moves to mass production

Solar wafer start up 1366 Technologies is considering listing, following the construction of its new factory in New York.

The company is currently hiring "hundreds of people" as it shifts towards mass production of its trademark Direct Wafer technology.

Launched in 2008, 1366 has so far attracted venture capital financing from Haiyin Capital and Polaris and North Bridge Venture Partners.

SolarCity raises $50m in sixth ABS

Californian solar leasing firm SolarCity has raised $49.6 million through its sixth securitisation.

The private placement is backed by revenues from power purchase agreements and lease contracts, and it yields 6.25%. It received an investment-grade rating of BBB from Standard & Poor's, and BBB+ from Kroll.

"Securitisation continues to be a cost-effective financing mechanism for us, even in a volatile market," said Radford Small, executive vice-president, capital markets. "In this transaction we received $3.13 of financing per watt of solar generation capacity in the portfolio, well outpacing the $2.71 per watt installation cost we achieved in Q4 2015."

Goldman Sachs and Credit Suisse Securities acted as co-structuring agents and co-bookrunners for the transaction.


Ecofys and Generation Foundation launch study into carbon pricing

Dutch consultancy Ecofys is to work with the Generation Foundation on a three-year study into how carbon pricing can facilitate sustainable economic growth while restricting global warming to 1.5oC.

Despite the increased popularity of carbon pricing among politicians and businesses, prices are often too low to incentivise the investment necessary to decarbonise emissions-intensive activities, the partners said. And the impact is often insufficient to persuade consumers to choose low-carbon goods and services.

The two partners will investigate how carbon pricing might be better integrated at an economic policy level, thus enabling its full mitigation potential.

"Carbon remains a largely unpriced externality in today's financial markets," said David Blood, senior partner of Generation Investment Management, the company that funds the Generation Foundation. "Although it is impossible to know the exact timing of the prospective tipping point when financial markets will fully internalise carbon risk, it is critical for investors to prepare for its inevitable impact."