governance in brief

Governance in Brief – June 24, 2021

The Activision Blizzard non-binding say-on-pay resolution was approved during the latest annual general meeting with only a 54% majority.

ESG interconnected

Using Systems Thinking to Avoid ESG Investing Blind Spots

For investors looking to enhance ESG risk management and the long-term impact of sustainability efforts, a systemic approach can help identify interventions that will most effectively mitigate the risk of negative outcomes or divert the chain of events towards a more sustainable trajectory. Typically, this involves moving from single-issue or company-specific tactics to progressively integrate system-level considerations in ESG strategies. Targeting systemic change through active ownership is one way to acknowledge and start unravelling the dynamic web of global challenges.

EU Taxonomy Update

Sustainalytics Weighs in on EU Taxonomy’s State of Flux

On May 7th, the European Commission published draft rules on how corporates and financial institutions should report on their alignment with the EU Taxonomy. The draft rules are laid out in a very technical document and not an easy read. This might explain why certain changes with significant impact on timelines and scope of the EU Taxonomy Regulation have flown under the radar of media and investors. Some of the impacts even escaped the attention of financial market participants responding to the consultation on the rules.

climate litigation Netherlands

What Climate Litigation Means for the Oil & Gas Industry

As the global economy looks towards recovery after being impacted by the pandemic, the oil and gas industry faces a growing wave of shareholder activism and climate litigation due to a heightened focus on an accelerated transition as an indirect impact of the pandemic – painting an increasingly bleak picture for those within the industry.

governance in brief

Governance in Brief – June 17, 2021

Netflix ‘s shareholders expressed discontent over the streaming giant’s governance structure and unresponsiveness towards past shareholder proposals.

La pertinence des labels ISR dans le contexte de la SFDR et des mesures de l’AMF contre le greenwashing

Une marée de réglementations liées à l’ESG s’abat sur les investisseurs institutionnels. Avec l’introduction de SFDR et les obligations de publication mises en place par l’AMF, se pose la question d’une possible obsolescence des labels ISR dans la lutte contre le greenwashing. Un phénomène qui inquiète de plus en plus les investisseurs et les régulateurs au vue de la croissance constante du marché des fond ISR. Pendant de nombreuses années, l’industrie s’est auto-régulée en s’accordant sur une définition générale de l’investissement responsable et/ou en se tournant vers les opérateurs de labels pour créer des standards de marché.

EU Flags

EC Taxonomy Delegated Act - Morningstar Comment Letter

Response to EC 7th May 2021 Draft Delegated Regulation, Taxonomy From Morningstar Inc. and Sustainalytics, a Morningstar Company Submitted via the European Commission portal for feedback

Race, Ethnicity and Public Equity

ESG Spotlight Report - Race, Ethnicity and Public Equity: A Global Snapshot

Sustainalytics has published a new ESG Spotlight Series report, Race, Ethnicity and Public Equity: A Global Snapshot, which presents an analysis of racial and ethnic issues linked to listed companies’ operations, supply chains and the societal impacts of their business activities. Our research finds that although a growing number of firms are disclosing diversity and anti-discrimination initiatives, management gaps persist and related controversies are on the rise.

governance in brief

Governance in Brief – June 10, 2021

The U.S. SEC will not enforce the changes to its proxy advisory regulations that it adopted in July 2020. Moreover, it will consider “further regulatory action” following a review of both these rules and related guidance documents issued in 2019.

Drill in ocean

Royal Dutch Shell Court Order Shifts Paradigm for Corporate ESG Accountability

On 26 May 2021, the Court of The Hague orders Royal Dutch Shell (RDS) to reduce CO2 emissions to a net 45% by the end of 2030 compared to 2019 through the Group Policy of the Shell Group. The order of a national (Dutch) court demands that a global company (RDS) fulfills its obligations under the Paris Climate Agreement, although RDS was not a party in that agreement, and there is no legal equivalent in The Netherlands. What are the broader consequences of this order, also globally and for other companies and potentially also other jurisdictions?

governance in brief

Governance in Brief – June 3, 2021

A Dutch court has ordered Royal Dutch Shell (“Shell”) to reduce its CO2 emissions by net 45% by the end of 2030. The lawsuit was filed in April 2019 by NGO Milieudefensie and claims that Shell is “misleading the general public with regard to the (un)sustainability of its policies” and set “insufficient” climate ambitions.

Thematic engagement graphic

Thematic Engagement - The Next Normal

Join Sustainalytics’ Stewardship Services team as they introduce an exciting, future-focused bundle of thematic engagements, The Next Normal.

governance in brief

Governance in Brief – June 3, 2021

A Dutch court has ordered Royal Dutch Shell (“Shell”) to reduce its CO2 emissions by net 45% by the end of 2030. The lawsuit was filed in April 2019 by NGO Milieudefensie and claims that Shell is “misleading the general public with regard to the (un)sustainability of its policies” and set “insufficient” climate ambitions.

governance in brief

Governance in Brief – May 20, 2021

Mizuho Financial Group, Japan's third largest bank by assets, will cease financing new thermal coal mining projects starting June 1.

Les points communs entre la réglementation française et européenne en matière d’ISR

Quand les nouvelles réglementations sur les investissements durables et responsables (ISR) furent annoncées avec le « EU Action Plan », les institutionnels français n'ont pas cillé. Depuis l'accord de Paris en 2015, de nombreuses nouvelles obligations réglementaires liées à la publication d’information et à l’analyse ESG ont influencé les stratégies d’investissements responsables des institutionnels français. Le règlement SFDR qui est entré en vigueur le 10 mars dernier vient s’ajouter au cadre réglementaire local en matière de reporting.

governance in brief

Governance in Brief – May 12, 2021

The US 2021 proxy season has seen an early surge in failed say-on-pay votes amidst greater scrutiny on executive compensation.

governance in brief

Governance in Brief – May 06, 2021

The Hong Kong Stock Exchange has issued a consultation paper covering proposed amendments to its Corporate Governance Code and related listing rules

Unwritten Risks – The True Costs of Mispriced Climate Change

Research shows that Property & Casualty insurance underwriters are not accurately pricing climate risks, and US government policy and program decisions are proving to be unsustainable. In our most recent blog, Justin Cheng talks about the resulting premium pricing corrections in the wake of intensifying extreme weather events. With this trend, a significant number of US homeowners are unable to obtain property insurance while taxpayers take on the increased cost of climate risk.

governance in brief

Governance in Brief – April 29, 2021

Canadian National Railway (“CN”) has made an unsolicited bid to acquire U.S. rail carrier Kansas City Southern (“KCS”), sparking a bidding war with its largest domestic competitor Canadian Pacific Railway (“CP”).

Is there a price to be paid for ESG Investing?

With a growing awareness around sustainability issues and accelerating regulatory developments in Europe, sustainable finance is one of the most significant talking points of our time. But what does sustainability investing mean for stakeholders and what are the resulting challenges? What’s more, what kind of impact does this have on a company’s mid to long-term strategy as well as its short-term profitability? By bringing together representatives from the regulatory side, the financial industry, the non-financial industry and an independent advisory firm, we aim to take a closer look at the consequences for the corporate world and answer a key question - is there a price to be paid for investing in ESG companies?