Daily ESG Briefing: Chris Hohn paid himself nearly $500m in dividends in 2020

The latest developments in sustainable finance

The Children's Investment Fund reportedly paid its founder, the billionaire Sir Chris Hohn, $479m in dividends last year after a 66% leap in pre-tax profits. The figure, which The Guardian describes as the largest annual earnings ever by an individual in Britain, is more than 9,000 times the median UK wage. TCI has been leading the Say on Climate campaign in recent months, trying to get companies to give shareholders a vote on their climate plans, mirroring the existing Say on Pay votes in the UK. 

Exxon has caved to pressure to ‘refresh’ its board, adding Michael Angelakis and Jeffrey Ubben as independent members. Angelakis is CEO of growth-oriented investment firm Atairos and ex- CFO of Comcast Corporation. Ubben co-founded impact investment hedge fund Inclusive Capital Partners last year with Lynn Forester de Rothschild, the CEO of the Coalition for Inclusive Capitalism. Exxon’s board now stands at 13. Engine No. 1, the activist investor leading the campaign against Exxon’s board on the basis of climate risk, welcomed the changes, but said the board still lacked “directors with diverse track records of success in the energy industry who can position the Company for success in a changing world”.

Republican politicians have criticised Nasdaq’s plans to require companies to have (or explain the absence of) at least two “diverse” directors. 12 Republican members of the Senate Banking Committee, led by ranking committee member Pat Toomey, have argued that the proposal, which has been filed with the US Securities and Exchange Commission, would interfere with a board's duty to govern in a company’s best interests. They also claim that the proposal could “harm economic growth” by dissuading companies with un-diverse boards from going public.

The UK Pensions Regulator has been criticised for its tardy enforcement of ESG disclosure requirements for pension schemes. Since 2019, schemes have been legally required to publish their stance on ESG issues as part of their broader Statement of Investment Principles, but Pensions Expert writes that the regulator has not started asking schemes to submit the web addresses of their published SIPs. Current Pensions Minister Guy Opperman is said to be “very concerned” about the number of schemes not complying with the disclosure rules.

Citibank has become the latest US bank to commit to net zero emissions from its financing activities by 2050, promising an initial plan “within the next year”. The move follows a campaign by US responsible investors including Mercy Investment Services, Boston Common, Arjuna Capital and the School Sisters of Notre Dame Cooperative Fund, who have now withdrawn a shareholder resolution on the subject at the bank. Of the six largest US banks, only Wells Fargo and Goldman Sachs are yet to commit to a net zero target.

Politicians are pulling their money out of New Zealand’s Kiwi Saver because of its investment in Raytheon Technologies, a company allegedly providing munitions to the Saudi military. On Friday, the investment fund confirmed that – following a review of whether Raytheon should be excluded on ethical grounds – it would remain in the stock, prompting James Shaw and Marama Davidson, the co-leaders of the country’s Green Party, to tell local media that they would be divesting Kiwi Saver, which is part-owned by the New Zealand Superannuation Fund. Steffan Berridge, Kiwi Saver’s Head of Quantitative and Responsible Investment, told reporters that “reactively excluding companies or whole industries from investment portfolios on the basis of market sentiment or trends in the moment is not a particularly powerful tool or a strong driver of actual change”. 

Global efforts to phase out plastic were shown to be unrealistic by the Covid-19 pandemic, according to Blackrock’s second Circular Economy progress report. The report found that consumer trends,including the massive increase in mask usage, reversed the reductions in single-use plastic usage seen at the start of the pandemic. It recommends that the focus be shifted to reducing plastic waste through the use of biodegradable plastics and improvements in recycling.