• BlackRock, Vanguard, State Street and Fidelity supported a significantly lower percentage of environmental proposals overall this year, compared to 2022
• While the average support for directors at Russell 3000 and S&P 500 firms remained relatively consistent overall, there were variations in support levels from BlackRock, Vanguard, and State Street.
• The number of submitted independent chair shareholder proposals increased 73% from 2022 to 2023

• Sustainability Reporting and Materiality
• Climate-related shareholder proposals
• Politicization of ESG
• Say on Climate

• Incentive system developments in the light of ECB supervision: introduction of ESG factors
• ISP Group incentive systems: evolution, application and extension of ESG KPIs
• Net Zero Target: remuneration policies as a tool to support the climate agenda

• The Financial Times reports Elliott campaign results in chief’s exit from US power company NRG: “Activist investor took 13% stake as it attacked energy group’s deal for Vivint Smart Home”.
• The Wall Street Journal reports Labor Group Plans Board Fight at Starbucks: “Coalition of unions seeks three seats on coffee giant’s board”.
• The Financial Times reports Activist investors pile pressure on Ladbrokes owner Entain: “Hedge funds take aim at chief executive of UK gambling company”.
• The Wall Street Journal reports Peltz’s Push for Disney Board Seats Boosted by Perlmutter’s Shares: “Former Marvel Entertainment executive Ike Perlmutter says he can ‘no longer watch the business underachieve its great potential’”.
• The Financial Times reports Sasol cancels shareholder meeting after climate activists storm stage: “South African petrochemicals group under fire over environmental targets to cut emissions”.

• The Financial Times reports UK bans vague ‘sustainability’ fund labels in greenwashing crackdown: “Financial Conduct Authority moves to outlaw ‘misleading’ marketing in $250bn sector”
• The Telegraph reports Unilever to tone down social purpose after ‘virtue-signalling’ backlash: “Dove and Hellmann’s maker says it will no longer seek to ‘force-fit’ brands with a cause.”
• Bloomberg reports Why Those Bank Emissions Numbers Are So Rosy: “Read the footnotes and you’ll discover many claimed reductions are due to factors outside of their control.”
• The Times reports Conflict of interest fear over ESG ratings from MSCI: “Concern that indices business could skew environmental ratings”.
• The Wall Street Journal reports Climate Activists Want SEC to Copy California, Europe: “Lobbying push relates to controversial proposal to make companies disclose emissions of suppliers, customers”.
• Responsible Investor reports Investors slam ISS for not heeding climate concerns: “Investors have called on the influential proxy adviser to consider climate-related improvements before it announces its final benchmark policy changes.”

• Glass Lewis Publishes its 2024 Proxy Voting Policy Guidelines for the U.S., Canada, UK, Europe, and Korea. “The Voting Policy Guidelines outline Glass Lewis’ approach to assessing ballot items at annual general meetings for the upcoming proxy season. To provide market stakeholders with helpful context, Glass Lewis will hold a webinar for North America on December 7, and for Continental Europe and the UK on December 12. To register for the webinars, please visit here. Key 2024 policy updates are outlined below:”
• The Financial Times reports BlackRock study finds gender-balanced companies outperform peers: “World’s largest asset manager publishes report as critics attack ESG factors in investing. However, Academic slams NBIM CEO backing of BlackRock gender research.” IPE reports “London Business School professor accuses NBIM leader of spreading misinformation with social media post about ‘seriously flawed’ BlackRock gender diversity report”.

• The Financial Times reports More than 50,000 companies to report climate impact in EU after pushback fails: “Rightwing attempt to block the adoption of new sustainability rules is voted down.”

• The Financial Times reports FRC waters down UK boardroom reforms after government shift: “Accounting watchdog says move designed to protect ‘economic growth and competitiveness’”.
• The Times reports NatWest cuts Alison Rose’s exit payout by £7.6m after Farage fiasco: “Former boss still expected to receive seven-figure sum.”
• The Financial Times reports London’s next reform? Doing away with shareholder rebellions: “Lobbyists want to scrap the 20% threshold signifying meaningful investor dissent at AGMs”. See here for the underlying Capital Markets Industry Taskforce open letter.
• The Quoted Companies Alliance has launched the 2023 QCA Corporate Governance Code.

• Le Haut Comité de Gouvernement d’Entreprise published its 2023 Report: “The High Committee for Corporate Governance is making public today its tenth annual activity report for the period from September 2022 to September 2023, a period during which the Afep-Medef code was revised to strengthen the missions of the board so that he is responsible for the implementation of the strategy in terms of social and environmental responsibility, particularly the climate strategy.”
• Proxinvest published its Annual report on executive remuneration (“Publication du rapport annuel proxinvest sur les rémunérations des dirigeants”) : “Proxinvest's report on executive remuneration for 2022 shows that the average total remuneration of the executive chairmen of the 120 largest listed companies in France (SBF 120) is 6% lower than in 2021, but still 14% higher than in 2019 (pre-pandemic), reaching €4.2m in 2022.”

• BVI published its 2014 Guidelines: “The ALHV are not binding, but are intended to promote dialogue between fund companies and companies in terms of good corporate governance. They are revised every year after the Annual General Meeting season.” Click here to view in English.
• The Financial Times reports Schaeffler raises Vitesco offer in response to shareholder opposition: “Billionaire family steps up move into electric vehicles with new bid valuing German rival at €3.8bn”.

• The Financial Times reports Telecom Italia boss defends KKR deal as only way to secure group’s future: “Board accepted €22bn offer for fixed-line phone and internet network despite objections from biggest shareholder Vivendi”.
• The Financial Times reports Mediobanca CEO scores victory in power struggle with top investors: “Alberto Nagel secures new term as shareholders back directors proposed by outgoing board”.
• Milano Finanza reports Capitali draft law, Savona rejects the additional changes on the slates. Also Pajno and Trevisan are critical (“Ddl Capitali, Savona boccia le novità aggiuntive sulle liste. Critici anche Pajno e Trevisan”): “According to the chairman of the stock exchange Commission, amendments are inconsistent with the original aim of the provision.”

• Expansión reports The ten priorities of boards for 2024 AGMs (“Las diez prioridades de los consejos para las juntas 2024”): “Expansion is echoed by the publication of the report Corporate governance and institutional investors, prepared annually by Georgeson and Cuatrecasas.”
• Cinco Días reports Sustainability touches the pockets of senior executives (“La sostenibilidad toca el bolsillo de los altos ejecutivos”): “88% of Ibex 35 companies have incentive payments linked to the performance of sustainable practices.”
• Expansión reports Sepi confirms that it is studying entering Telefónica (“Sepi confirma que estudia entrar en Telefónica”): “Sepi confirms that it is studying entering Telefónica; points out that “it has been monitoring the situation of Telefónica, SA and is carrying out an internal exploratory analysis related to a possible acquisition of a shareholding in said company. Said analysis by Sepi does not presuppose the adoption of a decision that involves said acquisition”.”

• The Financial Times reports Glencore sets clock ticking on break-up after sealing $9bn Teck deal: “Swiss group plans to merge Teck’s steelmaking coal business with its own assets before spinning off combined unit.”
• The Financial Times reports UBS chair aims for ‘bloodless coup’ with Sergio Ermotti succession: “Colm Kelleher sets target to compile shortlist for one of biggest roles in global banking.”

• The New York Times reports The Cybersecurity Lawsuit That Boards Are Talking About: “An S.E.C. lawsuit against a software company hacked by Russian state actors in 2020 could affect how companies handle cybersecurity risks.”
• FTI Consulting reports The Hidden Effects of Universal Proxy Cards: “In the past, activists winning board seats without support from both major proxy advisors, Institutional Shareholder Services (“ISS”) and Glass Lewis, was extremely rare; this year was a different story.” “Many believed that UPC would make it easier to compare activist and company board nominees head-to-head and, thus, companies would be more proactive in refreshing their boards. However, the opposite has occurred in 2023, with fewer Russell 3000 companies adding fewer directors than in prior years”
• The Wall Street Journal reports that Sam Bankman-Fried Is Convicted of Fraud in FTX Collapse: “Prosecutors presented evidence and testimony showing Bankman-Fried was the architect of a scheme to siphon FTX money to repay the debts of its sister hedge fund, Alameda Research, bankroll risky investments, buy luxury real estate and cover hundreds of millions of dollars in political donations.”
• The New York Times reports Five Days of Chaos: How Sam Altman Returned to OpenAI: “Now OpenAI, which for two days appeared to be on the brink of collapse just a year after introducing the popular ChatGPT chatbot, will replace a heavily criticized board of directors with a more traditional group including former Treasury Secretary Lawrence Summers and a former executive from the software giant Salesforce.”
• The Wall Street Journal reports that Wall Street’s ESG Craze Is Fading: “The third quarter was the first time more sustainable funds liquidated or removed ESG criteria from their investment practices than were added, according to Morningstar. That is a reversal from not that long ago, when companies were rebranding faltering funds to cash in on the billions of dollars flowing into sustainable investment products.”
• Governance Intelligence reports that Political spending increasingly seen as ESG metric: “The number of S&P 500 companies that fully or partially disclosed their political spending in 2023 or that prohibited at least one type of spending hit a high of 387, up from 385 last year, for example. There are also now 314 S&P 500 companies with general board oversight of company political spending, up from 307 companies a year ago.”
• The Deal reports Proposal at BofA Eyes New Breed of Pass-Through Voting: “Prolific shareholder proposal filer Jim McRitchie asked Bank of America to prepare a report on the feasibility of offering underlying investor clients the ability to vote shares held by the institution.”
• The Wall Street Journal reports Texting: Wall Street’s Latest Dilemma: “But in the age of the internet and smartphones, compliance experts said regulators need to clarify the types of business messages that are to be retained, instead of simply determining whether firms are engaging in off-channel communications.”

• The Business Times reports that To diversify boards, avoid ‘cookie-cutter’ approach to hiring, says SGX RegCo CEO: “In diversifying their boards, companies should not adopt a “cookie-cutter approach” to hiring candidates, but look for candidates that meet their unique needs. And while new entrants with diverse views can “upend established group dynamics”, the board will have to integrate them while consciously encouraging healthy board dynamics, said Tan Boon Gin, the chief executive officer of Singapore Exchange Regulation (SGX RegCo). Tan was speaking at the Singapore Institute of Directors’ (SID) Nominating and Remuneration Committees Chapter webinar on Tuesday (Nov 14), where he addressed the issue of board diversity and renewal.”
• Bloomberg reports that Asia Set for Experiment to End 'Alphabet Soup' of ESG Reporting: “Two of the world’s most influential ESG standards bodies are working toward a common approach for disclosures, an effort to improve reporting, reduce costs and streamline due diligence for companies. The International Sustainability Standards Board and Global Reporting Initiative will jointly launch a pilot project in Singapore Monday to create common ground for Asian companies to report on their environmental, social and governance impacts.”

• The Financial Times reports Japan embraces management buyouts as pressures mount at listed groups: “Highest number of takeover proposals since 2010 fuels predictions MBOs could become biggest driver of deals”.
• The Financial Times reports Japan is changing, slowly: “Investors would be well served to pay closer attention to Japan’s corporate governance reforms, which will probably have far greater bearing on long-term equity returns than the country’s monetary policy.”

• Fortune reports that Chinese corporate leaders worry a push to have babies could hurt gender equality: 'If someone has to sacrifice in the family, it’s always the woman': “The COVID pandemic was a step backwards for women in China, as uncertainty pushed them out of the workforce. When the World Economic Forum released its first gender gap index in 2006, China ranked in 63rd place out of 115 countries. By 2023, China had fallen to 107th place out of 146 countries. (The WEF looks at four areas to measure progress towards gender parity: economic opportunity, education, health, and political leadership). "During the pandemic, we saw that a lot of women went back to their families, right? Because if someone has to sacrifice in the family, it's always the woman," said Zhu Yanmei, executive vice president at BGI Group, a genomics company, at Fortune China's ESG Summit in Shanghai on Nov. 2. Women in other economies, like the U.S., India and Japan, also left the workforce in droves during the COVID pandemic. The pandemic also deepened another challenge, perhaps more concerning to policymakers in Beijing: It accelerated the decline of China's birth rates, as economic uncertainty and COVID-zero controls drove women to delay having children. New births fell to their lowest level on record in 2022, and the country's population declined for the first time since the 1960s. Beijing is now struggling to reverse the trend and get fertility rates back up again. The risk is that a push for women to have children could counteract a drive to improve gender equality. Panelists at the ESG Summit warned that Chinese companies often prioritize male candidates, hurting women in the workplace.”

• The SFC supports and sponsors the development of an industry-led voluntary code of conduct for ESG ratings and data products providers: “The Securities and Futures Commission (SFC) today announced that it supports and sponsors the development of a code of conduct for voluntary adoption by environmental, social and governance (ESG) ratings and data products providers providing products and services in Hong Kong. The Voluntary Code of Conduct (VCoC) will be developed via an industry-led working group, namely the Hong Kong ESG Ratings and Data Products Providers VCoC Working Group (VCWG). The SFC also welcomes the International Capital Market Association (ICMA) (Note 1) to act as the Secretariat of the VCWG. The Secretariat will convene and lead the VCWG, which comprises representatives from local, Mainland and other international ESG ratings and data products providers as well as key users from the local financial industry. The proposed VCoC will align with international best practices as recommended by the International Organization of Securities Commissions (IOSCO) (Note 2) and relevant expectations introduced in other major jurisdictions. The SFC, the Hong Kong Monetary Authority and the Insurance Authority will sit as observers to the VCWG. Further details are available in the terms of reference and participation list of the VCWG published by the ICMA.”
• SCMP reports that Sustainable business: more Hong Kong firms are getting their ESG reporting checked by external auditors as investors look for reliable data, industry survey finds: “Listed companies in Hong Kong are increasingly taking on external auditors to check their environmental, social and governance (ESG) reporting, as investors and stakeholders look for more reliable and verifiable data, according to an industry survey. “Assurance” for ESG reporting – essentially an audit or evaluation of the claims being made – is not mandatory for listed companies in most jurisdictions, including Hong Kong. But as the requirements and expectations for such disclosures become more stringent, investors and stakeholders are looking for more reliable and relevant data, the Hong Kong Institute of Certified Public Accountants (HKICPA) said in its “ESG assurance in Hong Kong 2023: An evolving landscape” report published on Tuesday. All of the roughly 2,600 Hong Kong-listed companies are required to publish annual sustainability reports on their ESG performance, alongside mandatory periodic financial reports.”
• SCMP reports that Hong Kong’s proximity to mainland China, ESG regulations put city in front to become green finance hub: fund managers: “Hong Kong has the potential to be a leading hub for green finance due to its proximity to mainland China, with sound regulations already in place for such types of investments giving the city a head start, according to top bankers. “Hong Kong has two fantastic advantages in the ESG [environmental, social and governance] and green finance areas,” Valerie Baudson, CEO of Amundi, said at a panel discussion on “ESG investments – at a crossroad” at the Global Financial Leaders’ Investment Summit organised by the Hong Kong Monetary Authority (HKMA) on Tuesday. The city is a natural gateway to mainland China, where the funding needs to manage the business transition are huge, Baudson said. So it is natural for mainland companies to tap funds in Hong Kong to finance climate-related projects, making the city an obvious choice to become a leader in green finance in the region, added the head of French fund manager Amundi, Europe’s largest with €2 trillion (US$2.14 trillion) of assets under management.”

• The Financial Times reports India tightens foreign investor rules after Hindenburg report on Adani: “New regulations aim for greater transparency to curb stock manipulation.”

• The Guardian reports that Qantas chairman heckled by shareholders at AGM as investors reject executive pay plans: “Results later showed that 83% of votes were cast against the remuneration plans, marking one of the biggest rejections on record for any Australian company, even rivalling those lodged against some of the country’s big banks after an inquiry exposed widespread misconduct in the financial sector in 2018 and 2019.”
• The Financial Times reports Fortescue shareholders reject executive pay proposal: “Protest vote comes after metals group approves A$1.1bn for green projects”.
• The Australian Financial Review (AFR) reports Directors urged to get advice as nature risk turns liability: “Boards have been warned to consider the toll on the natural environment from the way they do business as part of directors’ duties under the Corporations Act. In a groundbreaking legal opinion to be released on Thursday, two lawyers found directors should, at a minimum, be identifying nature-related dependencies and considering potential risks these pose.”
• The Australian Financial Review (AFR) reports Treasury aims to regulate sustainable-investment product labelling: “It wants to mobilise private capital for the transition at a time markets are focusing on sustainability issues beyond climate change and emissions. Treasury said it would incorporate nature and biodiversity in the strategy.”