Daily ESG Briefing: Campaign to overhaul Exxon board ‘accomplished nothing’, says governance pro

The latest developments in sustainable finance

Correction: This article was corrected to state that Main Street Investors Coalition is now defunct, and Bernard Sharfman is therefore no longer Chairman of its Advisory Council  

A critique of a recent campaign by activist investor Engine No.1 at Exxon claims that “nothing was really accomplished” by the appointment of three ‘climate savvy’ board members at the oil major. Bernard Sharfman, Senior Corporate Governance Fellow at the RealClearFoundation – a US non-profit in the journalism space – wrote that, while the pair spent tens-of-millions of dollars during the campaign, its outcome fell short of “mitigating managerial inefficiencies” at Exxon. Sharfman, who was also Chairman of the Advisory Council for the Main Street Investors Coalition – a now-defunct group described by US sustainability groups as “a thinly veiled effort to protect those corporations that are unwilling and unprepared to adapt to a changing world” – discusses the high-profile campaign in a draft article about the role of hedge fund strategies in creating value, describing it as “a deadly distraction in our efforts to mitigate climate change”.

The Climate Disclosure Standards Board (CDSB) has released guidance on water-related company disclosure, which it says is aligned with existing water reporting standards and will help businesses apply the TCFD beyond climate risk. Biodiversity Guidance is due for release in the fourth quarter. 

Australia’s Senate has passed a bill banning the import of products made using forced labour.  The bill will now move to Australia’s House of Representatives, controlled by the government which does not support the legislation. Rev Patrick, the independent senator who tabled the bill, said its passage was “an important step forward in the international efforts to combat modern slavery”. 

Brazil’s finance sector and international investors with exposure to the country have been warned that a suite of legislation weakening environmental protection and indigenous rights in the country puts their investments at risk. In a letter, NGOs urge the financial institutions to publicly position themselves against the proposed laws – including a bill that frees up mining and extractive activities on indigenous lands and another which loosens the rules for environmental licensing in Brazil.

Germany’s sustainable investment forum FNG has sent a letter to the European Commission urging it not to include nuclear energy as a sustainable economic activity in the EU green taxonomy. The letter, signed by the likes of Deka Bank and Union Investment, says “the unresolved issue of nuclear waste storage has always placed nuclear energy at odds with sustainability”. Last month, the EU announced that nuclear, along with gas, will likely be included in the taxonomy as part of a new section for activities that aren’t considered eligible under the existing EU Taxonomy Climate Delegated Act.