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Spain: Georgeson published the 8th Edition of the ESG Investment Observatory in partnership with the Sustainability Excellence Club
Georgeson have partnered with Club de Excelencia en Sostenibilidad to present a new edition of the ESG Observatory, whose objective is to identify the main trends in this field and to take stock of the main concerns of investors.
US: Georgeson’s data is quoted in Institutional Investor’s article titled “Shareholder Support Drops as ESG Proposals Get More Political”
“In its most recent report, proxy solicitor and advisory firm Georgeson says investor support may be declining because the proposals are increasingly centered on issues that are caught in the cross hairs of politics, including abortion. “Investors have shown a decreasing level of support for ESG proposals as they become more specific and focused on the impact of environmental, societal, and political issues, including board and workforce diversity, political spending, and reproductive rights,” the report said.”
US: Data from Georgeson’s 2023 Early Season Review is referenced in RealClearMarkets’ article titled “To Understand ESG Activism, Look To Shareholder Resolutions”
“Georgeson, a firm that specializes in the issue, has calculated that the number of ESG shareholder proposals filed at Russell 3000 companies has been increasing for four straight years, up from 754 in the 2020 proxy season to at least 951 in the 2023 season.”
Italy: Georgeson’s data is referenced in an Il Sole 24 Ore article titled “Shareholders’ Meetings: Growing Opposition on the issue of Remuneration” (“Assemblee, cresce no dei soci sul nodo delle remunerazioni”)
“Institutional investors - entities such as small and large investment funds, insurance companies and pension funds - now occupy a space in Italy comparable to that of strategic investors. The gap between the average share of capital attributable to shareholders controlling listed groups and that relating to minority shareholders at shareholders' meetings in 2023 was effectively nil (1.35%) and clearly down on 2018, when it stood at around 10%, according to data from proxy solicitor Georgeson.”
Taiwan: Georgeson’s data is referenced in a China Times article titled “Shareholder activism blows to Taiwan Kuanliang International: 70 Taiwanese companies should plan ahead next year” (“股東行動主義吹向台灣 寬量國際：明年70家台企應未雨綢繆”)
“[Shareholder activism] has been popular in European and American markets for a long time, and it has begun to spread to capital markets such as Japan and South Korea in the past few years. According to the statistics of Georgeson, the world's largest voting proxy solicitation and corporate governance consulting firm, Japan and South Korea have had 19 and 20 votes, including Fujitec Co. and Shinhan Financial Group, since last year. companies that were successfully (Successfully) or partially successful (Partially Successfully) proposed by shareholder activists, including active shareholders who hold only 0.01% of the shares.”
UK: Georgeson hosted an Investor Forum event focused on reviewing the 2023 AGM Season in the UK
Georgeson’s Daniel Veazey presented some of the key trends from the 2023 UK AGM Season including the director election votes as well as how investors have approached the higher levels of share issuance being sought by FTSE 350 companies without pre-emption rights.
Italy: Georgeson’s Francesco Surace spoke at ESG Day 2023 on a panel about the role of passive investors in the engagement process hosted by Associazione Italiana Investor Relations.
“ESG DAY 2023 will host speeches by numerous experts in the ESG sector, including institutional investors, ESG funds, analysts and rating agencies, who will take turns, within the numerous panels scheduled for the day, in dealing with topics of great news in the context of sustainability and responsible investment. The event represents an important opportunity for in-depth analysis and exchange between professionals working in the Investor Relations and ESG fields.”
Italy: Georgeson’s Alberto D’Aroma spoke at ETicaNews’s ESG Business Conference on a panel titled “L’azienda politica”
Now in its eighth edition, the ESG Business Conference represents the event for in-depth analysis and presentation of the results of the Integrated Governance Index (IGI), the only research project on ESG integration in corporate governance and management models.
Italy: Georgeson’s Francesco Surace spoke at a Mercer Webinar titled “Nomination and Remuneration Committees Observatory” (“Osservatorio Comitati Nomine e Remunerazione”)
The Board of Directors community meets every six months to discuss the most relevant issues on the Committees' agenda and to present the Mercer survey on the remuneration of CEOs and Board members of listed companies in the FTSE MIB index. The most recent meeting, held on 20 June 2023, focused on the main trends emerging from the FTSE MIB 2023 survey, presenting an overview of compensation paid and remuneration policies. We then delved into how board members should address ESG objectives and what actions are required of Sustainability Committees.
Bloomberg reports that Constellation Announces New Directors in Pact With Activist Elliott: “Constellation has been moving away from being a family-controlled business after the brothers Rob and Richard Sands received a payout for giving up their special voting powers over the company. Rob Sands also stepped down from his board-chair role after the company’s annual meeting on Tuesday.”
ESG Today reports that 50% of CEOs Have Pay Tied to ESG Goals, up from 15% One Year Ago: IBM Survey: “The earlier study also found that nearly three quarters of executives agreed that ESG needs to be a higher priority for their organizations, but noted challenges to sustainability efforts including inadequate data (the top cited challenge at 41%), followed by regulatory barriers at 39%. The study found that less than half of CEOs (45%) reported confidence in their organizations’ ability to report on ESG strategy and initiatives, and that this lack of confidence was mirrored by consumers, with consumer trust in corporate sustainability statements plummeting over the past few years to only 20% from 48% in 2021.”
IR Magazine reports that Support continues to fall for climate-focused resolutions, finds Morningstar: “Within the US market, average support has declined by around 9 percentage points over the study period, from 25.5 percent in 2022 to 16.7 percent in 2023. By contrast, the five non-US markets in the research have seen a slight rise in average support, from 14.7 percent to 17.6 percent.”
ESG Today reports that Amundi Votes Against 500 Directors over Climate Strategy Concerns: “Leading European asset manager Amundi revealed today that it has opposed the re-election of more than 500 directors at 84 companies in the Energies & Utilities sectors so far this year, over concerns about their companies’ climate strategies, representing more than 20% of re-election candidates in those sectors. The firm also stated that it voted against executive remuneration-related proposals at 89 oil & gas and utilities companies, over their failure to include climate-related performance criteria in senior management variable compensation schemes.”
Ethos publishes its methodology for assessing the climate impact of companies: “On Thursday, Ethos unveiled a new methodology for assessing global warming caused by the activities of listed companies. The methodology also aims to measure the credibility of companies' climate transition plans and the risks that climate change poses to their activities. The "Ethos climate transition ratings" will enable institutional investors to comply with the new transparency and climate reporting requirements.”
Les Echos reports on ESG : The Achilles heel of asset managers? (“ESG : Le talon d’Achille des gérants d’actifs?”) : “Les craintes soulevées par le greenwashing témoignent du scepticisme ambiant autour des affirmations en matière de durabilité. Les gérants d’actifs doivent faire preuve d’une plus grande transparence pour impulser le changement. Une telle démarche contribuera à renforcer l’engagement auprès des sociétés en portefeuille avec, à la clé, une accélération des avancées en faveur des objectifs climatiques.”
Diario Responsable reports that 4 out of 5 IBEX-35 companies have a committee dedicated to ESG issues (“4 de cada 5 empresas del IBEX cuenta con una comisión dedicada a los asuntos ESG”): “Forética has published the report: "Sustainability in the boards of directors of IBEX 35 companies". The research shows that the focus on ESG issues has been gaining in importance in recent years, as more and more companies recognize the need to address long-term environmental and social challenges to ensure their success and meet the expectations of investors and society as a whole. According to the study, currently, 4 out of 5 IBEX companies have a committee dedicated to ESG issues; 1 out of 2 IBEX 35 companies have an exclusive Sustainability Committee and 29% add this responsibility to a mixed-name committee (Appointments and Sustainability Committee) by sharing attention to other matters of interest to the company.”
IPE reports that Ethos joins class action against UBS/Credit Suisse merger: “Switzerland-based Ethos Foundation is joining a class action against the valuation given to Credit Suisse at the time of its takeover by UBS. Zurich-based law firm Baumgartner Mächler is preparing a lawsuit on behalf of a single shareholder that will be filed before a competent court in Zurich. The merger act provides the legal basis for shareholders to claim adequate compensation in the form of cash for their shares and, if successful, Credit Suisse shareholders would benefit from the new exchange share ratio, according to lawyers at LegalPass, the start-up launching the class action. Shareholders can claim compensation from what it is considered a discounted price for the acquisition of Credit Suisse on LegalPass’s platform. The goal of the class action is to obtain cash compensation equal to the difference in value between the share price set by the merger agreement and the price set by the court, it said. Ethos Foundation is participating in the financing of the action, but will not receive any compensation from LegalPass.”
Bloomberg reports that ESG Advocates Say GOP Backlash Gives Industry an Opportunity: “Delaware State Treasurer Colleen Davis said it’s a good thing that more conversation is centered on the future of environmental, social and governance factors because it will help the investment strategy become better defined.”
Bloomberg reports that Blue States Counter Anti-ESG Laws With Pension, Climate Measures: “Investment managers working with public pensions in Illinois would have to disclose how they integrate factors such as greenhouse gas emissions and labor practices into their decisions and analyses under a measure (H.B. 2782) awaiting action by the governor. A separate Illinois measure (S.B. 2152) would require additional disclosures related to pension proxy voting, while a new Colorado law requires climate risk reporting by the state’s public retirement association.”
Forbes reports on How East Asia Is Dealing With Greenwashing: “With the surge in popularity of environmental, social and governance (ESG) investing, it has become more important than ever to ensure that related companies and projects are as “green” as they purport to be. PwC estimates that ESG-related assets under management (AuM) will reach US$33.9 trillion by 2026, from US$18.4 trillion in 2021. With a 12.9% annual growth rate, ESG assets are on track to make up 21.5% of global AuM by 2026. With that in mind, throughout East Asia, governments are developing different approaches to combat the growing problem of “greenwashing” – the act of making false or misleading statements about the environmental benefits of a product or practice. Because consumers are often willing to pay more for eco-friendly products, greenwashing can be lucrative for the perpetrators.”
Business Times reports that on Temasek’s emissions problem is Singapore’s emissions problem; Asia’s protein transition: “Temasek, Singapore joined at hip for climate goals. Singapore state-owned investor Temasek’s total portfolio emissions rose slightly to 27 million tonnes of carbon dioxide equivalent for the year ended March 2023, from 26 million tonnes the previous year. The main culprit? Singapore Airlines (SIA), which saw group passenger capacity recover to 79 per cent of pre-pandemic levels as global air travel restarted. Speaking to reporters, Temasek chief executive Dilhan Pillay said much of Temasek’s ability to hit its decarbonisation targets hinges.”
Bloomberg Law reports that Toyota Soars on Optimism Over EV Plans, Shareholders’ Meeting: “Toyota shares surged the most since March 2020 following the reappointment of Chairman Akio Toyoda at the company’s annual shareholder meeting Wednesday, a leadership decision some overseas investors had opposed. The shares were up 8% early in the afternoon, trading at their highest level since early 2022. The AGM had become a referendum of sorts on the Japanese carmaker’s electric-vehicle strategy. A small but growing list of shareholders opposed the reappointment of Toyoda as chairman, arguing that the auto giant has fallen behind rivals because of his commitment to a ‘multipathway’ approach — offering customers various options by selling gasoline and hybrid cars while investing in EVs, hydrogen and carbon neutral fuels. Some are also demanding transparency on lobbying over climate policies that appear to favor EVs or seek to ban cars that burn fossil fuels.”
Asia Financial reports that US Keen to Help China on Deal to Curb Methane Emissions: “A key goal of this week’s talks between US climate envoy John Kerry and his Chinese counterpart Xis Zhenhua is to get an agreement on methane emissions. Kerry arrived in Beijing on Sunday after months of diplomatic disruptions to try to boost cooperation between the world’s two biggest carbon polluters. Experts have said any move to cooperate on methane – a greenhouse gas responsible for roughly 30% of global warming – could provide a way forward. ‘Methane is particularly important for our cooperation,’ Kerry told a congressional hearing on Thursday in Washington. “China agreed to have a methane action plan out of our prior talks in Glasgow (in 2021), and again in Sharm el-Sheikh” last November.”
SCMP reports that HKEX proposal for mandatory climate disclosures gets nod from businesses, but not without concerns over timeline, scope: “Representatives of Hong Kong’s business sector agree with the stock exchange’s plan to make climate-related disclosures mandatory and aligned with international standards – but not without concerns. The business community agrees that the move will help the city maintain its competitiveness as a global financial centre, according to feedback from a three-month consultation period that ended on Friday. But concerns exist around the level of ambition, as well as the challenges companies will face achieving compliance. During the consultation, Hong Kong Exchanges and Clearing (HKEX) sought market feedback on enhancing climate-related disclosures under its environmental, social and governance (ESG) framework, including making such disclosures mandatory, as opposed to the current ‘comply or explain’ basis. New disclosure requirements would be introduced in alignment with climate standards from the International Sustainability Standards Board (ISSB), a body that was set up during the COP26 global climate summit in Glasgow in 2021 to consolidate various reporting standards. The ISSB released its finalised standards on June 26.”
SCMP reports that ESG disclosures: Hong Kong firms should start verifying climate, sustainability data ahead of audit mandate, experts say: “Companies serious about enhancing the credibility of their sustainability disclosures should proactively engage external auditors to attest to the quality of their disclosures, before auditing of such information becomes mandatory, according to experts. External audits can enhance confidence in environment, social, governance (ESG) information that stakeholders consider the most important and which outside investors and lenders rely upon while making capital-allocation decisions that help fight climate change and reach other sustainability objectives. ‘As ESG assurance is an emerging trend, companies should be seeking assurance over information that is the most material to key stakeholders, such as investors and creditors, as a first step,’ Tan Ee Sin, EY’s climate change and sustainability services partner for Hong Kong and Macau, told the Post.”
Charles Moore looks at HSBC’s ‘Defence Equipment Sector Policy’: “I have before me HSBC’s ‘Defence Equipment Sector Policy’. As part of its ‘responsible banking’, the bank not only, as might be expected, refuses to provide financial services for manufacturers, sellers, buyers or users of biological and chemical weapons, but also of ‘other weapons’. These are defined as ‘guns or missiles, platforms for weaponry, such as tanks and combat aircraft; and material parts of a weapon or a platform for weaponry with no generally accepted non-military use, such as the turret of a tank’. Thus – my example, not HSBC’s – no British company making tanks, NLAWS or Storm Shadows to help Ukraine could get any help from Britain’s largest bank. HSBC says this is because all that it does is ‘underpinned by the principles and values which drive our overall approach to business’. These same principles and values see no problem in closing the accounts of anti-Beijing democratic parties in Hong Kong.”
The Times of India reports that Sebi mandates listed companies to disclose family pacts: “In a decision aimed at boosting corporate governance by seeking stricter disclosures from promoterled companies, Sebi has made it mandatory for listed entities to disclose all family agreements, which could potentially impact the management or control of these firms.”
The Australian Government Treasury published its Consultation paper on Climate-related financial disclosure: “This consultation paper seeks views on proposed positions for the detail, implementation and sequencing of standardised, internationally-aligned requirements for the disclosure of climate-related financial risks and opportunities in Australia. In particular, views are sought the proposed positions relating to coverage, content, framework and enforcement of the requirements.”
ESG Today reports Australia to Launch Decarbonization Plans for Key Sectors: “Australia’s Minister for Climate Change and Energy Chris Bowen announced today that the government will develop sectoral decarbonization plans, starting with six key emissions-intensive sectors, to support the government’s net zero plan and interim climate targets. Sectors selected include electricity and energy, industry, the built environment, agriculture and land, transport, and resources. Additionally, the waste sector will be included in the industry plan and the circular economy will be a cross-cutting issue for all sectors.”
The AFR reports that ASIC accuses Vanguard of greenwashing in $1b-plus bond fund: “Despite promising consumers its ‘Ethically Conscious Global Aggregate Bond Index Fund (Hedged)’ did not invest in bond issuers with significant business activities in a range of industries, including those involving fossil fuels, Vanguard was actually invested in activities linked to oil and gas exploration.”