• Shareholder activism continues to increase, with more activist investors, including domestic funds, entering the market as Japanese management teams increasingly find themselves at odds with their investors
• Corporate Governance Code revisions and the restructuring of Japanese capital markets clearly show Japan’s commitment to attracting global investors and aligning with global expectations
• Voting against directors is increasing, with 13.6% of director elections facing opposition of 10% or more in 2023
• Proxy advisors ISS and Glass Lewis have adopted stricter stances on director elections for companies on board gender diversity or the presence of substantial cross-shareholdings, and increasingly make ‘against’ recommendations
• Remuneration rates and poison pill provisions were less contentious in 2023

• Nature Action 100’s purpose and next steps
• The investor expectations
• An overview of the investor participants
• A comparison between Nature Action 100 and Climate Action 100+
• Key actions for companies to take

• 12% fewer issuers opted to supplement their in-person meetings with technology to enable one way engagement e.g. webcasting
• 10% of FTSE 100 companies returned to in-person meetings, 2% of those offered alternative engagement options
• The percentage of name on register shareholders attending AGMs dropped by 12.6% in FTSE 250 companies
• AIM 100 clients saw an increase in pre-meeting online voting, but a decrease in the proportion of their issued share capital voted

• Preview of 2024 executive compensation matters
• Compensation clawback rule implementation
• Pay versus performance disclosure updates
• New SEC disclosure requirements
• ISS and Glass Lewis updates
• Shareholder proposals and voting trends
• Investor expectations heading into 2024
• Investor voting decisions from the 2023 season

• The health of the UK markets – the investor perspective
• Voting trends in 2023 and our predictions for 2024
• ESG activism – the past, present and future
• Key regulatory changes on the horizon

• The Wall Street Journal reports Nelson Peltz Boosts Disney Stake, Seeks Board Seats: “Activist’s Trian Fund Management has accumulated a holding valued at more than $2.5 billion”.
• The Wall Street Journal reports Activist Builds News Corp Stake, Plans to Seek Changes: “Starboard believes media company trades at significant discount due to its structure”.
• The Wall Street Journal reports Engaged Capital Builds Stake in North Face, Vans Owner: “Activist seeks strategy review and possible board refresh at VF”.
• The Financial Times reports Activist Oasis stands to net £40mn profit from Wagamama owner sale: “Apollo’s £506mn deal to buy The Restaurant Group includes ‘irrevocable undertaking’ for HK-based fund to exit its holding”.
• Reuters reports Japan's Cosmo to call another shareholder vote in activist defence: “Cosmo Energy Holdings (5021.T) on Tuesday said it would call another shareholder vote in December to seek approval for a "poison pill" takeover defence against a group of activist investors, escalating the high-profile battle.”
• Bloomberg Law reports that CEOs Are More Vulnerable Than Ever as Shareholder Activism Rises: “Members of senior management should be aware that shareholder activists have directly targeted CEOs with increasing frequency since the 2017 proxy season, says Olshan Frome Wolosky’s Andrew Freedman.”
• Reuters reports that Activist hedge fund Trian targets insurer Allstate: “Nelson Peltz's activist hedge fund Trian Fund Management has built a stake in Allstate Corp (ALL.N), one of the insurers struggling to cope with the fallout of natural disasters such as the Maui wildfire in Hawaii, people familiar with the matter said. The move could increase pressure on Chief Executive Tom Wilson, who has led Allstate since 2007, to turn the Northbrook, Illinois-based company around following five quarters of losses.”

• The Financial Times reports Strive Asset Management plans move into model portfolios: “Activist manager founded by US presidential candidate Vivek Ramaswamy aims to focus on its proprietary ETFs”.
• The Wall Street Journal reports SEC Fines Deutsche Bank Fund Unit for ESG Claims, Money Laundering Allegations: “Commission says investment arm misled investors in how it incorporated ESG factors into its investment process.”
• The Financial Times reports ESG ratings: whose interests do they serve?: “Regulators and politicians are focusing on the accuracy, transparency and potential for conflicts of interest with sustainability scores.”
• Responsible Investor reports Are companies ready for CSRD reporting and materiality assessments?: “Is the shift away from mandatory data points in Europe’s new sustainability reporting rules a compromise worth having?”
• The Times reports Investors grow wary of ‘greenwashing’: “‘Responsible’ investments appear to be losing favour with private investors. A survey has found that only 53 per cent of respondents consider environmental, social and governance factors before investing, compared with 60 per cent last year and 65 per cent in 2021.”
• IPE reports Investors do not care about physical climate risks: “One of the most pressing questions facing today’s climate research is whether climate change risks are reflected in stock prices. In a peer-reviewed study recently accepted for publication in Journal of Banking and Finance, we found that investors only care about climate change risks when policymakers intervene, not about physical climate risks.”
• The Conversation reports ESG bonuses are on the rise: Are they improving sustainability or just increasing executive wealth?: “An increasing number of companies are paying bonuses to executives in the pursuit of sustainability. Driven by an ever-growing focus on global issues, more than three-quarters of large, publicly traded companies in Europe and North America now use environmental, social and corporate governance (ESG) metrics when determining executive bonuses.”
• ESG Today reports that CDP to Align with ISSB Climate Disclosure Standard in 2024: “CDP also announced plans to consider additional sustainability reporting standards, including reflecting the new Taskforce on Nature-related Financial Disclosures (TNFD) framework in its questionnaire from next year, and to reflect the SEC’s upcoming climate disclosure rule, as well as the European Sustainability Reporting Standards in its disclosure system.”

• The Financial Times reports Chief executives really need to lengthen their attention spans: “Their horizons are now often shorter than those of the shareholders they work for”.
• The Financial Times reports Broadridge Financial’s proxy ‘monopoly’ faces challenge from start-ups: “Fintechs face daunting task in taking business from the ‘800lb gorilla in the room’”.
• Fortune reports How private equity’s hiring spree is upending the C-suite at public companies: ‘There’s a draining of succession talent’: “It’s long been a running trend for CEOs and COOs to leave big companies in favor of helming private-equity-owned portfolio companies. But increasingly, lower-ranking executives are following a similar path.”

• The Financial Times reports UK rural land risks being forested over in corporate ‘greenwashing’: “Minister warns of farmland turned over to tree planting and other carbon offset schemes.”
• The Daily Mail reports British investors pull £2.5bn out of ESG funds amid backlash over 'woke' stock-picking: “ British investors have pulled nearly £2.5billion out of ESG funds in the past five months amid a backlash over ‘woke’ stock-picking. A report by funds network Calastone showed outflows from equity funds that meet ‘environmental, social and governance’ criteria hit £485million in September.”
• The Competition and Markets Authority launches Green Agreements Guidance to help businesses co-operate on environmental goals: “New guidance published by the CMA will help businesses understand how they can collaborate on environmental sustainability goals without breaking the law.”
• Board Agenda reports Business relays UK Corporate Governance Code concerns: “Responses to the FRC’s consultation on its proposals highlight practical concerns about implementation and compliance.”

• Responsible Investor reports France withdraws Say on Climate amendment from green industry bill: “The amendment was removed from France's green industry bill at the last minute ahead of a debate and vote in the joint committee last night.”
• Les Echos reports When governance errors lead to deadlock (“Quand les erreurs de gouvernance conduisent à l'impasse”): “Démission de son président, cession de certaines de ses activités, chute en Bourse, Atos traverse une crise profonde. Colette Neuville propose quatre axes de réflexion à tirer de cette série d'échecs.”
• Les Echos reports ESG reporting: these new rules that will apply to sustainability auditors (“Reporting ESG : ces nouvelles règles qui s'appliqueront aux auditeurs de durabilité”): “The Civil Affairs and Seal department has just revealed the outlines of the French ordinance which will transpose the European CSRD directive, which revolutionizes extra-financial reporting.” 

• Handelsblatt reports Only auditors should review sustainability reports (“Nur Wirtschaftsprüfer sollen Nachhaltigkeitsberichte prüfen”): “In the future, companies will have to create sustainability reports and then have them audited externally. But technical experts feel disadvantaged as possible examiners.”
• Handelsblatt reports Deutsche Bank presents its own climate plan – consequences for lending (“Deutsche Bank legt eigenen Klimaplan vor – Folgen für Kreditvergabe”): “With its first climate plan, the institute is introducing barriers to loans to particularly energy-intensive industries. However, the bank remains vague in some areas.”

• Eumedion designates 'remuneration policy' and 'tax transparency' as focus points for the 2024 AGM season: “Eumedion expects all Dutch listed companies to base a substantial portion of the variable remuneration elements on stretching sustainability goals that are material to the company. These goals should be sufficiently challenging, measurable and auditable.”

• 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”.
• IlSole24Ore reports Milan stock exchange, managers' compensation goes green (“Borsa di Milano, i compensi dei manager si colorano di green”): “The number of listed companies that link remuneration to ESG factors rises to 127 compared to 106 last year. It emerges from the 2022 Consob report on non-financial declarations”
• Il Messaggero reports Poste Italiane is becoming more of a sustainability leader according to Moody's Analytics and Morgan Stanley (“Poste Italiane sempre più leader di sostenibilità per Moody's Analytics e Morgan Stanley”): “The rating agencies gave Poste Italiane a positive rating for the company's commitment to ESG policies.”
• Milano Finanza reports Reform of Consolidated Financial Act, here is the market's advice to the government (“Riforma del Tuf, ecco i consigli del mercato al governo”): “It will take at least 12 months to rewrite the Consolidated Financial Act. Unless in the next parliamentary steps after the approval in the Senate Finance Committee of the Decreto Capitali within which was included a broad delegation to rewrite the CFA, dating back to 1998, when the general manager of the Treasury was Mario Draghi, it is decided to give more time to the executive to write legislative decrees. The delegation of authority after all is broad and it is not certain that it will not touch on both the mechanism of multiple voting rights for long-term shareholders, gradually reaching a multiple of ten, and new rules for presenting the slate of the outgoing board of directors when renewing the top management of listed companies.”

• Expansión reports The Spanish National Securities Market Commission criticizes bank share buybacks (“La Comisión Nacional del Mercado de Valores (CNMV) critica las recompras de acciones de la banca”): “The chairman of the CNMV alerts the banking sector about the implications of share buybacks on its long-term strategy; companies, especially banks, must "reinforce their own resources" in the medium term if they want to continue investing, grow, compete internationally and transform successfully.”
• Expansión reports Cox is preparing to go public in Spain after its merger with Abengoa (“Cox se prepara para salir a Bolsa en España tras su fusión con Abengoa”): “The Cox group, which already has its energy subsidiary listed, is taking steps for it to move to the Continuous Market and in addition the parent company also reaches the stock market.”
• The CNMV analysed information offered by listed companies on European Sustainability Taxonomy: This is the first year in which non-financial issuers have had to provide information on activities aligned with environmental taxonomy and it is the first report of the CNMV on this subject. In accordance with the basic direction of the taxonomy, the data reported shows that the proportion of eligibility tends to be significantly higher than that regarding alignment. 

• Investment & Pensions Europe reports that Swiss asset management association to launch stewardship code with SSF: “The Asset Management Association Switzerland (AMAS) will soon launch a Swiss Stewardship Code for asset owners, with the aim to promote active dialogue and exercise of shareholder rights in Switzerland, chief executive officer Adrian Schatzmann told IPE. AMAS also published a year ago the self-regulation for sustainable finance, a further effort to make Switzerland a leading international hub for sustainability. The Swiss Stewardship Code, which will be published in October together with Swiss Sustainable Finance, will serve as a guide to asset owners, as well as asset managers and other financial service providers.” 

• The Financial Times reports that US picket lines put shareholders in the spotlight over pay: “Asset managers likely to face greater scrutiny over their actions on executive rewards”.
• The Economist reports Are America’s CEOs overpaid?: “Unions are taking aim at the soaring compensation of bosses”.
• Reuters reports SEC chief says new California law could 'change baseline' for coming SEC climate rule: “ A pending law in California that would require companies to make climate-related disclosures could affect how federal regulators consider the costs of their own forthcoming climate regulations, Wall Street's top regulator told lawmakers on Wednesday.”
• The Wall Street Journal reports that Audit Firms Face Stiffer Mandate to Verify Client Details Under New Rule: “At present, audit firms are required to request that a third party, such as clients’ lenders or customers, confirm the accuracy of certain information, such as the amount of accounts receivable. Audit firms are permitted to assume that the lack of a response is a corroboration of accuracy. Under the new rule, however, audit firms will have to receive confirmation, usually electronically, that the stated amounts of cash and cash equivalents held by third parties, typically lenders, in addition to accounts receivable, are accurate.”
• Reuters reports that US court upholds Nasdaq board diversity rule: “The groups said the rule violates the U.S. Constitution's prohibition of discriminatory laws and restraints on free speech. They argued that those restrictions on government extend to Nasdaq because the SEC could penalize the exchange if it does not enforce the rule. The SEC and Nasdaq argued that the exchange is a private entity not bound by restrictions on government. They said the rule is not a quota but a disclosure requirement that provides standardized information on board diversity.”
• Fortune reports that CEOs are leaving their jobs in record numbers in what is the executive suite version of The Great Resignation: “The government and nonprofit sector topped the list for CEO turnover, with more than 350 leaving their posts this year, up more than 85% over the same period last year. The technology sector saw the second-highest churn rate, with more than 140 CEOs abandoning the boardroom, up almost 50% from last year.”
• Bloomberg reports that Top House Republican Demands SEC Turn Over Documents on ESG: “A top House Republican is threatening to subpoena the Securities and Exchange Commission for any documents about US involvement in crafting European Union environmental, social and governance regulations that GOP lawmakers say harm American businesses.”
• CFO Dive reports PCAOB chief slams auditors for 40% error rate: ““Audit opinions were signed without completing the audit work required to verify the accuracy of financial statements,” Williams said.”
• Reuters reports US SEC shortens deadline to disclose 5% stock ownership to 5 days: “As adopted, the rule also shortens the disclosure deadline for certain institutional investors to 45 days from the end of the quarter in which their ownership stake surpasses 5%. Previously, the deadline was 45 days from the end of the calendar year.”

• The Financial Times reports Activist fund targets Japan rail company with $12bn stake in Tokyo Disneyland owner: “Palliser’s campaign comes as companies are under intensifying pressure to raise corporate value”.
• The Financial Times reports It’s time for Japanese equities to leave the doldrums: “Ukraine and pandemic aftermath set scene for reversal of main stock index underperformance”.
• The Financial Times reports Japan stock exchange adopts name and shame regime to boost corporate valuations: “Plan to list groups that are meeting guidelines will enhance investor scrutiny of laggards”.
• Reuters reports Japan M&A blazes trail as global deals decline: “Japan's M&A market is standing out against a worldwide decline this year, thanks to surging domestic deals as rising costs, stricter governance rules and shareholder pressure force companies to explore strategic options.”

• Reuters reports that EU energy chief urges China to commit to renewables target, methane pledge: “The European Union's top energy official urged China to commit to renewable energy and methane reduction targets in talks in Beijing this week, but stopped short of calling on the Asian superpower to be more ambitious in cutting its carbon emissions. Kadri Simson held talks with China's National Energy Administration chief Zhang Jianhua in the first in-person EU-China energy talks since 2019. The meeting comes amid strained ties between the two trade partners, and just after Brussels angered Beijing by announcing a probe into Chinese subsidies for electric vehicles.”
• Pensions & Investments reports that China, India face daunting challenge to grow retirement security amid demographic, cultural shifts: “Retirement systems in China and India, home to the world's largest populations with around 1.4 billion people in each country, are still in nascent stages but are expected to grow as their economies expand and their demographics shift. In both countries, the first pension pillar — a state-sponsored pension system — has been seen as inadequate, and the second pillar — employer-sponsored retirement plans — is often insufficient in meeting people's rising post-retirement needs. A third pillar focused on building up individual, private retirement accounts is still in very early stages in both countries, but as the two economies grow, so will these retirement schemes, industry players said.”

• SCMP reports that Hong Kong’s ability to retain top ESG talent depends on making the city a hub for green tech and finance: Deloitte: “Hong Kong needs to sharpen its competitive edge and strengthen its ecosystems for sustainable finance and green tech to retain the thousands of environmental, social and governance (ESG) experts it aims to attract through high salaries and immigration programmes, according to accounting firm Deloitte. Making Hong Kong into a true hub for green finance and tech would give the city a long-term edge over global peers, said Mohit Grover, lead partner for climate and sustainability services at Deloitte Hong Kong. ‘That would mean that these people will be given opportunities that are world-leading, while some other jurisdictions are also providing [similar] sets of incentives,’ he said.”
• SCMP reports that Climate change: Hong Kong-listed companies at risk of failing to meet more stringent emissions-reporting rules, PwC says: “Hong Kong-listed companies must step up their preparedness for more challenging climate-related reporting requirements set to be phased in starting next year, according to audit and consulting firm PwC. Only a quarter of 300 Hong Kong listed companies PwC studied voluntarily made any disclosures of their so-called scope 3 greenhouse-gas emissions – those attributable to their suppliers and customers – in their 2022 financial year reports on environment, social and governance (ESG) issues. Under a proposed rules change awaiting formal adoption by Hong Kong’s bourse, beginning next year companies will need to at least state the upstream and downstream activities that give rise to scope 3 emissions. After two financial years, they will have to quantify such emissions.”

• The India Times reports Almost 50% of Nifty 50 CEOs, MDs earn over Rs 20 crore a year: “A study by Deloitte reveals that 46% of chief executives/managing directors at Nifty-50 companies earned over Rs 20 crore in FY23, compared to 27% five years ago. The study also found that half of the promoter-incumbents earned more than Rs 20 crore in FY23, compared to 33% in FY18. The study analysed 41 of the Nifty 50 companies and found that compensation to CEOs/MDs has grown 12% annually over the last five years.”

• Reuters reports Australian Shareholders' Association to vote against resolutions in Qantas AGM: “The Australian Shareholders' Association will vote against a bunch of resolutions, including the nomination of Qantas (QAN.AX) Chief Executive Officer Vanessa Hudson as a director of the airline and its remuneration report, it said on Thursday.”
• The Australian Financial Review reports Demand for fossil fuels will peak by 2030: global energy body: “Global demand for fossil fuels is expected to peak within seven years as electrification and Russia’s invasion of Ukraine accelerate the push towards renewables and away from gas. The International Energy Agency’s closely watched annual report warns that to keep global temperatures on track to avoid catastrophic climate change, fossil fuel extraction and use will need to fall nearly 30 per cent by 2030.”
• The Australian Financial Review reports Commuters captured under tough climate regime: “Federal Treasury is finalising laws that will enforce the mandatory climate disclosures and have given companies a three-year grace period from class-action lawyers. The Australian Accounting Standards Board, responsible for developing the Australian climate disclosure standards, said that its exposure draft, released on Monday, largely stuck to the draft international standards released at the end of June.”
• The Canberra Times reports Energy giants fail on climate lobbying disclosures: “A new report finds that energy corporations have done well when making commitments to climate policy and even had some of the highest lobbying activity of any companies in Australia, but did not follow through on their promises at the same rate nor disclose the specific lobbying payments they made.”
• The Australian Financial Review reports Rio, BHP and Fortescue at electrification crossroads: “All three companies are relying on renewable energy to replace the gas and diesel that currently power their mining, rail and port operations, but are making slow progress on the vast solar and wind farms that will be required. Fortescue chief executive Dino Otranto says the electric haul trucks being developed by Fortescue are something like a super-sized version of a Toyota Prius.”
• FS Sustainability reports AASB publishes climate-related disclosure standards draft: “Australian Sustainability Reporting Standards (ASRS) will first focus on climate-related financial reporting, under an exposure draft released by the Australian Accounting Standards Board (AASB). AASB has opened up a 120-day comment period on ASRS 1 General Requirements for Disclosure of Climate-related Financial Information and ASRS 2 Climate-Related Financial Disclosures, ending on 1 March 2024, with the two new standards to kick in from 1 July 2024.”
• FS Sustainability reports ASX50 lags on disclosure of political spending: “Australia's largest listed companies lag US counterparts when it comes to governance and disclosure of political spending, according to research from the Australasian Centre for Corporate Responsibility (ACCR).”