Governance in Brief – September 22, 2022
DOJ unveils crimefighting policies for corporate misconduct The U.S. Department of Justice has announced a new “carrots and sticks” approach to fighting corporate crime that encourages companies to report misconduct while making it more difficult for repeat offenders to enter settlements and deferred prosecutions.
Physical Climate Risks: 6 Things Portfolio Managers Need to Know
The negative physical impacts of climate change are being felt by communities and corporations globally and are likely to get worse in the coming years. The knock-on costs of more frequent “once-in-a-century” climate events on economies are likely to rise. To prepare for this looming threat, investors must forecast the asset-level effects of climate change on companies in a granular and sophisticated way. Here are six things portfolio managers should know to manage and mitigate the physical risks of climate change to their portfolios and meet growing list of climate-focused reporting requirements.
Governance in Brief – September 8, 2022
BHP shareholders seek coherent climate policy Shareholder activist group The Australasian Center for Corporate Responsibility (“ACCR”) has, with the support of circa 100 co-sponsors, submitted a set of climate-focused resolutions to BHP Group’s next AGM. The ACCR is urging the miner to "proactively advocate for Australian policy settings that are consistent with the Paris Agreement's objective of limiting global warming to 1.5° Celsius."
ESG Risks Affecting Data Centers: Why Water Resource Use Matters to Investors
Data centers play a critical role for many technology and telecom companies and for their supporting servers, digital storage equipment and network infrastructure for data processing and storage. Data centers require high volumes of water directly for cooling purposes and indirectly, through electricity generation. Morningstar Sustainalytics’ recent activation of the Resource Use Material ESG Issue (MEI) within its ESG Risk Ratings recognizes water risks of data centers.
Governance in Brief – August 18, 2022
HSBC pressured to spin off its Asia business Hong Kong-based investor Ping An, which holds an 8.3% stake in HSBC, continues to pressure the lender to spin off its Asia business. The investor first advanced the idea in April 2022, but was at that point rebuffed by HSBC’s leadership.
Impact of US Supreme Court’s EPA Ruling on US Utilities’ Carbon Exposure
The Clean Power Plan was created using a directive from the Clean Air Act that enabled the EPA to set emission limits for air pollutants based on the best available technology to reduce emissions. The EPA aimed to cap carbon emissions and curb greenhouse (GHG) emissions by changing the composition of the existing operational power generation assets by forcing the closure of coal plants through strict emission caps, resulting in a system-wide transition to renewable energy.
Governance in Brief – August 11, 2022
At Tesla AGM, ESG proposals fall short of goal line Tesla’s August 4, 2022, AGM rejected seven shareholder proposals addressing: reporting on anti-harassment and discrimination efforts, board diversity reporting, employee arbitration, lobbying reporting, freedom of association and collective bargaining, child labour reporting, and water risk reporting.
Governance in Brief – August 4, 2022
Alibaba plans primary listing in Hong Kong Alibaba Group will apply for a primary listing in Hong Kong, with the process expected to be completed by the end of this year. Currently, the Chinese tech giant has a primary listing in the US and a secondary listing on the Hong Kong Stock Exchange.
Why ESG Investors Follow the Elon Musk Twitter Takeover
A self-proclaimed “free speech absolutist”, Musk has criticized what he views as excessive moderation on online platforms, indicating his desire to ease Twitter’s content moderation policies and only remove content deemed illegal by governments.
Governance in Brief – July 28, 2022
German government bails out gas supplier Uniper amid energy crisis The German government has agreed to bail out gas importer Uniper in a deal worth EUR 15 billion. Faced with reduced gas flows from Russia and soaring energy prices, the company had recently asked the government for financial support, making use of newly adopted legislation allowing energy companies to receive support from the government.
Cobalt ESG Risks Threaten Electric Vehicle Supply Chain
Transport electrification is at the forefront of the international climate transition agenda. Because of this, global demand for cobalt is projected to grow fourfold by 2030, which raises the question, are mineral supply chains robust enough to fuel a sustainable EV revolution?
Correlation of Business Ethics and Corporate Culture - 5 Lessons from the Banking Industry
To protect a company’s reputation and economic position, its employees play an essential part in organisational risk mitigation strategy by demonstrating consideration for systemic business risk, taking accountability, and being willing to escalate concerns. Companies with a strong, ethical corporate culture have much to gain—improved employee performance, morale, and retention, and in the long run, bolstering the bottom line.
Governance in Brief – July 7, 2022
Microsoft and Cisco Systems have come under shareholder pressure to bring their tax disclosure in line with the Global Reporting Initiative’s GRI 207 tax transparency standard, which requires granular country-by-country disclosure on non-U.S. profits and tax payments, as well as other financial data relating to tax risk appetite