• Reuters reports that Engine No. 1 aims to tie company valuations to climate impact: “Engine No. 1, which won an against-the-odds board challenge against Exxon Mobil Corp earlier this year, is publishing a framework for investing on Monday that pushes for a value to be assigned to how corporate activities affect climate and society. The "total value framework" provides significant new insight into how the San Francisco-based firm, which has about $430 million in assets under management, picks companies to invest in. The framework was outlined exclusively to Reuters ahead of its publication. […]  In the white paper to be published on Monday, co-authored with Wharton School management professor Witold Henisz, an adviser to the firm, Engine No. 1 said traditional environmental, social and corporate governance (ESG) scores were too detached from the financial value assigned to companies. Instead, Engine No. 1 attaches a value to a company's impact on climate change, water consumption, workforce diversity or human rights. In the absence of company data that allows this, it uses models that draw on sources such as the United Nations and the International Labor Organization. The full paper is available here.

• The Financial Times reports on Why activist investors are taking aim at the insurance industry: “Low valuations and big cash piles at UK and European groups open the door to agitating shareholders.”

• The Financial Times reports that Vivendi makes move towards takeover offer for Lagardère: “Group controlled by Vincent Bolloré has agreed to buy activist Amber’s stake in French media and retail group.”

• Repubblica reports that Bluebell chiede la testa dell'ad di Solvay per l'inquinamento a Rosignano (“Bluebell ask for the Solvay CEO’s head because of the Rosignano pollution”) (in Italian): “For a year, the activist fund has criticised the management of the Belgian chemical giant, which in 2018-2020 dumped 89 tonnes of heavy metals into the Tyrrhenian Sea, but replies: "They are not toxic". Criticism is also levelled at Msci's triple-A ‘ESG’ rating, which has meanwhile cut it.”

• The Financial Times reports that Activist Bluebell takes stake in GlaxoSmithKline to push for change at top: “Hedge fund is pushing for chief executive Emma Walmsley to reapply for her job.”

• The Financial Times reports that Hedge fund Elliott takes stake in energy group SSE: “US investor is pushing for Scottish company to separate or sell its renewables business.”

• Handelsblatt reports that Investoren fordern von RWE schnellere Abkehr von der Braunkohle ("Investors demand RWE to move away from lignite more quickly") (in German): “The activist investor Enkraft Capital has joined RWE and is taking a massive approach to RWE CEO Krebber. Other investors join in.”

• The Financial Times reports that Deutsche Wohnen investor seeks injunction to block capital increase: “Proposed deal to help seal €18bn Vonovia merger ‘unprecedented and legally questionable’, says US hedge fund.”

• The Financial Times reports that Activist fund Elliott targets Toshiba by building stake: “People close to Japanese group say size does not exceed 5%.”

• The Sydney Morning Herald reports, Investor revolt rocks AGL as climate demand intensify: “The support for the resolution at AGL’s investor meeting on Wednesday is the biggest vote ever recorded for a climate-focused shareholder push in corporate Australia without board support.” 

• The Financial Times reports on the Mystique of Elliott Management at issue in challenge from Twitter shareholder: “Lawsuit over 2020 settlement says social network’s board folded after being intimidated by aggressive hedge fund.”

• The Harvard Law School Forum on Corporate Governance hosts a piece on The Coming Shift in Shareholder Activism: From “Firm-Specific” to “Systematic Risk” Proxy Campaigns (and How to Enable Them): “A new form of shareholder activism has appeared almost out of the blue […] in this new form — “systematic risk activism” — the key actors are index funds and diversified asset managers. Nor do they necessarily expect a positive market reaction in the short-run. Being fully diversified, these investors care little about the specifics of any individual company in their portfolio. For example, State Street Global Advisors holds over 11,000 stocks, all for the long-run.”

• The Financial Times reports that Corporate bonus culture impedes the push for net zero: “Global investment community’s commitment to sustainability is more ambiguous than meets the eye.”

• The Economist reports that Sustainable investing faces the beginnings of a backlash: “Ever keen to hold companies to account, virtuous investors now confront tricky questions.”

• The Wall Street Journal reports that Tallying Emissions Becomes a New Challenge for Companies: “Disclosures might be required soon on the amount of greenhouse gases released, but for now uniform reporting standards are lacking.”

• The Financial Times reports on the Big Four accounting firms rush to join the ESG bandwagon: “New investment plans and strategies aim to tap sustainability boom but fears of backlash persist.”

• The Financial Times reports that Widespread lapses in climate risk reporting found in company accounts: “Review of over 100 groups in carbon-intensive sectors identifies more than 70% not including impact.”

• The Financial Times reports that Climate funds often fall short of Paris goals, says report: “Green-themed investment funds found to offer range of exposure to oil and oil-service companies.”

• Reuters reports that U.S. SEC proposes rules urging hedge funds, endowments to disclose votes: “The top U.S. securities regulator on Wednesday proposed requiring large hedge funds and endowments to disclose how they vote on executive pay, bringing this clutch of influential investors in line with other top funds that have made their pay votes public for a decade.”

• The Wall Street Journal reports that Chevron Girds for Activist Challenge After Exxon’s Proxy Battle Defeat: “Executives at oil company met recently with Engine No. 1, the hedge fund that waged a successful fight for seats on its rival’s board.”

• The Wall Street Journal reports that Exxon Considers Pledging ‘Net Zero’ Carbon by 2050: “Chief Executive Darren Woods faces pressure from investors to take a more decisive approach to reducing emissions.”

• The Wall Street Journal reports that the SEC Asks Dozens of Companies for More Climate Disclosures: “Agency letters request information about material risks related to climate change.”

• Ignites reports that Proxy-Plumbing Reform Group Reaches Impasse: “A group of transfer agent firms, broker-dealers, institutional investors, asset managers and others convened to resolve tension regarding privacy for shareholders who vote proxies. After two years of discussions, however, the group could not agree to reform the process.” 

• Michael Callahan, David Larcker and Brian Tayan of Stanford have published a paper on The General Counsel View of ESG Risk: “General Counsel, on average, support ESG-related activities but harbor significant concern for the legal and regulatory risk of these activities. General Counsel also express notable concern about the potential liability from disclosure of ESG-related activities, and the reputational and productivity costs caused by CEO and employee-driven activism.”

• The Wall Street Journal reports on Big European Banks Get Prodded on Climate Promises: “Investor activist ShareAction says many lenders are lagging in their commitment to cut financing to carbon polluters.”

• EFRAG PTF-ESRS (European Financial Reporting Advisory Group Project Task Force on European Sustainability Reporting Standards) welcomes its 'Climate standard prototype' ​working paper: “The PTF-ESRS welcomed this presentation as a robust basis for future PTF-ESRS discussions and further steps towards a draft standard.” The full version of the working paper is available here.

• The Financial Times reports that Rolls-Royce’s biggest investor calls for board ‘refresh’: “Causeway Capital urges incoming chair to consider depth of management team’s expertise.”

• The High Pay Centre has published its CEO pay survey 2021: Median FTSE 100 CEO now paid £2.69 million: “The median FTSE 100 CEO took home £2.69 million in 2020. This is the lowest level of median pay since 2009, and is a reduction of 17% from the median FTSE 100 CEO pay in FYE 2019, which stood at £3.25 million.” Read the full report here.

• The Financial Times reports on Incoming Frasers chief could earn £100m in shares in three years: “Full details of remuneration package for Mike Ashley’s successor expected this week.”

• City AM reports on The rock, paper, scissors of ESG: when social missions clash with corporate governance: “In ESG terms, Ben & Jerry’s decision not to renew the contract of its Israeli licensee was described by the company as an ‘S’ decision. The irony is that its ‘social mission’ is likely to prompt a heavy-hitting response by investors in its parent, Unilever, on governance, or ‘G’, grounds.’”

• The Financial Times reports that FTSE 100 bosses urged by UK government to set net zero targets: “Push aimed at gathering corporate support ahead of COP26 climate summit in Glasgow.”

• The Financial Times reports that Bridgepoint’s carried interest disclosure shows flaw in UK rules: “Investors don’t get the full picture if these payments to executives aren’t made clear.”

• The Financial Times reports that Big asset managers missing from revamped UK stewardship code: Third of those that applied to be signatories failed to pass review process, says FRC.” FRC lists successful signatories to the UK Stewardship Code here.

• The Financial Times reports that Grant Thornton fined £2.3m for Patisserie Valerie audits: “Firm showed ‘serious lack of competence’ in its work on collapsed UK café chain, says Financial Reporting Council.”

• The Financial Times reports on Making UK boardrooms truly representative: “Gender pay gap figures for executives show women are missing out on the top roles.”

• In the Financial Times, Catherine Berjal and Anne-Sophie d’Andlau from CIAM argue that French shareholders need to team up with activists on ESG issues: “Boards are still too insulated from investor pressure to reform”. Meanwhile, Cédric Lavérie from ISS comments that I tend to agree that many French boards are still too insulated from investor pressure to reform: “I also share the view that the Florange law had a reinforcing effect on that state of affairs. But not because it ‘disproportionately benefits traditional, long-only institutional investors’ as written in the article but, on the contrary, because it shifted ‘long-term ownership from foreign institutions to insiders and families’ as explained by Thomas Bourveau in ‘The Capital Market Consequences of Tenure-Based Voting Rights: Evidence from the Florange Act’."

• Ouest-France reports that At Orange, Danone, L'Oréal or Saint-Gobain... combined Chair & CEO roles are no longer popular (“Chez Orange, Danone, L’Oréal ou Saint-Gobain… les PDG n’ont plus la cote”): (in French). “Towards the end of omnipotent bosses? Danone is welcoming its new CEO on Wednesday 15 September 2021, after having cut the position of former CEO Emmanuel Faber in half. A trend that is becoming more widespread... but which still does not benefit women.”

• Responsible Investor reports that French investor group writes to biggest companies in ‘say-on-climate’ campaign: “Executive bonuses should have a portion linked to decarbonisation targets, says FIR.” Read the full letter here. “By promoting Say on climate, i.e. an annual consultative vote at the general meeting of shareholders on the basis of a report prepared by the board of directors and relating both to the  shareholders on the basis of a report prepared by the board of directors and relating to both the and the prospective part of the extra-financial performance document, the FIR intends to provide a permanent and regular framework for shareholder dialogue on this crucial subject.”

• The Wall Street Journal reports that At Deutsche Bank’s DWS, Issues With Data Were at Heart of Sustainable-Investing Problems: “Fund managers ignored calls to use ESG information, according to internal emails and DWS’s former sustainability chief”. Additionally, the Financial Times reports that PwC advised DWS on sustainability while investigating greenwashing claims: “Probe that dismissed concerns may have suffered from conflict of interest, whistleblower says.”

• DW reports on German DAX-30 to swell to DAX-40: “In a big shake-up, the DAX German share index is getting bigger. Since its inception 33 years ago, it has had 30 members. The reform of the country's most important stock market barometer will start in September.”

• Reuters reports that Rights group files complaint against German retailers over Chinese textiles: “A human rights group filed a complaint to German prosecutors on Monday alleging that several fashion retailers profited from forced labour in China's Xinjiang region.”

• The Financial Times reports that Deutsche Bank chair warns of clash between foreign regulators and German governance: “Achleitner says international watchdogs struggle to accept legal limits of country’s supervisory boards.”

• Manager Magazin reports that Index-Erweiterung lässt Frauenquote in Dax-Vorständen sinken (“Index expansion causes women's quota on Dax boards to fall”) (in German): “These consequences of the enlargement to 40 companies are hardly to be welcomed: the proportion of women on the boards of directors and supervisory boards of Dax companies is noticeably declining. In addition, employee co-determination is deteriorating.” 

• Frankfurter Allgemeine reports that Achleitner wieder Spitzenverdiener (“Achleitner top earner again”) (in German): “The head of the supervisory board of Deutsche Bank has been at the top of the ranking of the best-paid chief supervisors in the Dax for years. But he also has to work the hardest for it.”

• Frankfurter Allgemeine reports Warum kommt ein Unternehmen mit 35 Mitarbeitern in den Dax? (“Why does a company with 35 employees get into the Dax?”) (in German): “Nothing is produced, no service is provided for customers. How Porsche Holding nevertheless made it into the Dax.”

• Il Sole 24 Ore reports on Rating ESG, arriva la fase due dell’indagine Consob (“ESG Rating, pahse 2 of Consob inquirí begins”) (in Italian):  “Having completed its survey, the Financial Market Supervisory Authority will focus on discussions with market operators and stakeholders.”

• Milano Finanza reports that Dal 25 ottobre Aim Italia diventa Euronext Growth Milan (“From October 25th the Aim Italia will become Euronext Growth Milan”) (in Italian): “The operation will uniform the name of the market for small and medium company with an high growing potential with the name of the Brussels, Dublin, Lisbon, Oslo and Paris’ Stock Exchange’s similar segments.”

• Borsa Italiana reports on Salone del risparmio 2021, innovazione e sostenibilità al centro della tre giorni di Assogestioni (“Salone del risparmio 2021, innovation and sustainability at the centre of a three-days of Assogestioni”) (in Italian) “In the first half of this year, inflows into sustainable funds exceeded inflows into traditional funds.”

• Il Sole24Ore reports on Eni, una governance rafforzata per supportare la svolta sostenibile ("Eni, a strengthened governance to support the sustainable turning point") (in Italian) “The chairman of San Donato Milanese’s group narrates ‘the crucial turning point of February’, with the plan at 2024: ‘when the temptation was to give up, we pushed on the energy transiction. The results show we were right’.”

• Dutch Senate approves legislative proposal for “More balanced ratio between men and women in management and supervisory boards”: “Supervisory boards and non-executive directors of public companies are required to have a balanced composition in the sense that at least one third is made up of men and one third of women. An appointment contrary to this legislation is null and void. However, the legislation does not apply to re-elections within eight years from the first appointment. Additionally, in case of “exceptional circumstances” a male director may be elected for two years. Public and private companies are also required to formulate appropriate and ambitious targets for the proportion of men and women on the management board, the supervisory board (private companies only) and the sub-top. They are required to report on this to the Social and Economic Council (SER). The law will be evaluated after five years and both provisions will expire after eight years. Ministers Sander Dekker (Legal Protection) and Ingrid van Engelshoven (Education, Culture and Science) aim to have the law take effect on January 1, 2022.”

• Het Financieele Dagblad reports that Zelfs pensioenreus APG begint met passief beleggen (“Even pension giant APG starts with passive investing”) (in Dutch): “APG, the largest pension fund in the Netherlands, is making a turn in its long-standing policy of carefully selecting all investments itself. The pension giant will, for the first time, simply follow indices for a small part of its assets when investing. The move by APG is a new signal that passive investing, also known as index investing, is continuing to grow. For years, asset managers tried to outperform the market average by picking just the right stocks after lengthy research. But the costs of this form of investing, also called active investing, are higher than blind investing in all stocks of a stock index, such as the AEX or the S&P 500.”

• IP&E reports that ABP brought to court over fossil fuel investments: “Fossil Free starts lawsuit against the Dutch civil service scheme over its fossil fuel investments.”

• The AFM reports that Investment funds can better inform their investors about sustainability: “The information provided by funds about sustainability risks and sustainability characteristics is often too general, as a result of which investors gain too little insight into what they are investing in. That is one of the conclusions of the Netherlands Authority for the Financial Markets (AFM) in an exploratory study into the application of the Sustainable Finance Disclosure Regulation (SFDR).”

• The Spanish National Securities Market Commission (CNMV) published its reports about the reports on corporate governance and the remuneration of board members of listed companies for 2020 (in Spanish). Both documents reflect, in aggregate and summarised terms, the main conclusions of the reports on both matters that companies submitted to CNMV over the course of this year.

• El Economista reports that Inditex, Siemens Gamesa y REE lideran el nuevo Ranking ESG de 'elEconomista' (“Inditex, Siemens Gamesa and REE lead the new ESG Ranking of 'elEconomista'”) (in Spanish): “In the initial ranking, the best positioned companies were, in this order, Endesa, Inditex, Ferrovial, Naturgy and Siemens Gamesa. This ranking is the result of applying a proprietary algorithm, which combines the scores of different providers.”

• Finanzas reports on Cuando los proxy no pintan nada en el IBEX ("When the opinion of proxy advisors does not matter in the Ibex-35”) (in Spanish): “According to the study published by Georgeson about Spanish listed companies, only 50% of the proposals, for which ISS and Glass Lewis issued a negative recommendation, obtained less than 80% of support.”

• The Financial Times reports that Norway grapples with rising political influence of $1.4tn oil fund: “Questions over mandate of the world’s largest sovereign wealth fund spice up national elections.”

• The Financial Times reports that A crucial change is needed to improve corporate governance in Japan: “Reporting requirements hinder engagement between shareholders and companies.”

• South China Morning Post reports that China to set up mainland’s third stock exchange in Beijing as Xi Jinping promises more digital trade zones: “Chinese President Xi Jinping tells China International Fair for Trade in Services that boosting the country’s service sector can help the post-coronavirus global recovery. Recent moves by Beijing such as a tech crackdown and anti-sanctions law have hit investor confidence, but Xi says country ‘wants to work with all sides’.”

• Euromoney reports that Evergrande and the China investment delusion: “Evergrande is in trouble, drowning in debt and besieged by angry investors. It is bad news for shareholders, but it also raises harder and darker questions about investing in China. In its latest report, published May 2021, the Asian Corporate Governance Association ranked China 10th in the region for corporate governance.”

• Reuters reports that China tightens scrutiny on $9.3 trillion fund industry: “China's top securities regulator pledged on Monday to crack down on mismanaged private funds and weed out fake ones, as the government becomes more assertive in dealing with an industry worth 60 trillion yuan ($9.28 trillion).”

• AsianInvestor reports on How China could benefit from green bond allure: “The country's issuance of sustainable debt should flourish, but it needs to improve its rules, standards and research.”

• South China Morning Post reports that China gives the nod for investors to buy offshore debt via Hong Kong, opening the southbound leg of Bond Connect: “Mainland China’s investors will be allowed to buy and sell offshore debt through Hong Kong in a widening of the Bond Connect transborder investment channel that enhances the city’s role as China’s financial centre.”

• Hong Kong Stock Exchange announced that it has signed MOU With Guangzhou Futures Exchange: “Under the Memorandum of Understanding, HKEX and GFEX will explore the feasibility of cooperation on product development in both onshore and offshore markets, with the aim of supporting China to peak carbon emissions by 2030 and reach carbon neutrality by 2060. Both exchanges will also work together in areas such as clearing, technology, and collaborate on marketing and investor educational efforts.”

• The Securities and Futures Commission (SFC) announced on Aug 20, 2021 that it has concluded its consultation on climate-related risks in funds: “SFC issued amendments to the Fund Manager Code of Conduct and a circular setting out expected standards for fund managers managing collective investment schemes to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures.”

• The Financial Times reports that BHP shareholders urged to vote against climate plan: “Glass Lewis says miner’s targets for reduced gas emissions not based on science.”

• The Australian Financial Review reports that ASX 200 companies failed to appoint a single female CEO last year: “The low number of female leaders among Australia’s largest companies was particularly worrying given that the COVID-19 pandemic was likely to exacerbate the challenges faced by women even further.”

• The Sydney Morning Herald informs Higher borrowing costs for companies not hitting gender targets: “As progress has been made, attention is now turning to getting more women into senior management roles (...) As part of that push some banks and other financial institutions are linking a company’s borrowing costs to gender equality targets. It’s a trend that first emerged in the US, UK and more recently in Australia.”

• The Australian Financial Review reports, CSL chief executive Paul Perreault’s $61m pay day: “CEO pay has jumped by close to 20 per cent this year as record profits flow through to business leaders after many experienced pay freezes and bonus cuts last year due to COVID-19.” Moreover, "[w]hen many Australians are still experiencing deep financial hardship, a 19 per cent CEO pay increase in 2021 will appear excessive." 

• The Sydney Morning Herald explores Board games: Is a cosy directors’ club a risk to corporate Australia: “There are least 50 directors of ASX 300 companies who sit on four or more listed company boards. For investors and shareholder advisory groups, this is a problem.” “When times are good, it might be easy to juggle multiple board roles, but in a crisis it can be far more challenging for a director to monitor a company given the significant time commitments involved.”

• The Australian Financial Review reports that Industry super drives increase in ESG support: “Australia’s top 50 super funds voted in favour of various ESG shareholder proposals in 42 per cent of instances last financial year, according to new research from the Australasian Centre for Corporate Responsibility.”

• The Australian Financial Review reports that Boards suffer an ‘identity crisis’ as ESG demands rise: “Changes in expectations are broader still – making it harder for boards to define the new goal posts now that traditional financial metrics are often considered insufficient.”

• The Australian Financial Review reports that Banks are two-faced when it comes to climate action: Market Forces: “The major banks lent $835 million to expansionary fossil fuel projects in 2020, which climate action group Market Forces says is inconsistent with their pledges to support the economic transition to net zero emissions by 2050.” “Market Forces, which is planning on hitting ANZ, NAB and Westpac with shareholder resolutions at their December AGMs, calling on the banks to stop all funding of expansionary fossil fuel projects.”

• The Australian Financial Review reports IFM Investors to carve out thermal coal exposure by 2030: “IFM will make no new investments in any infrastructure asset that garners more than 20 per cent of its revenue from thermal coal, and will exit thermal coal-reliant assets by 2030 across its $172 billion portfolio.” 

• The Australian Financial Review reports, Net zero pledges soar after earning season boost: “Nearly a third of Australia’s 300 largest listed companies have now committed to net zero emissions, with the large caps leading the charge.” Moreover, “[t]he push to decarbonise will add a further tailwind to mergers and acquisitions.”