ESG Round-Up: BNP Paribas votes against 57% of director appointments in Japan

Technology firms with higher ESG scores receive higher valuations on average, according to a new paper from Janus Henderson. The paper looked at 200 equity securities over a three-year time frame, and found that companies which performed better on ESG metrics tended to see valuation premiums. In Asia in 2020, higher scoring ESG companies received an average premium of 36% versus lower scorers.

The UK’s Pensions Regulator has issued new guidance for trustees reviewing their exposure to the Russian market. The regulator warns that trustees should not be making “hasty, uninformed decisions” about their portfolios in response to the conflict, and that they should be vigilant about actions that may need to be taken, including considering actions to take to align with UK sanctions. Some of the UK’s largest schemes including the BT Pension Scheme and Universities Superannuation Scheme have announced their exit from Russia over the past week.

A group of ethical and Church banks in Germany has called on fellow banks in the country to review their business relationships with Russia, saying that “the responsibility of market participants does not end with the implementation of sanctions”. The ten member group, which includes Triodos, Evangelische Bank and Bank für Kirche und Caritas, said that banks operating in Germany should pressure their parent organisations to end business relationships, and called on investors to consider what is being financed with their money, and which banks they should be working with.

BNP Paribas Asset Management voted against the appointment of 57% of directors in Japan, and 37% of directors across its portfolio in 2021, with the majority of oppositions due to poor female representation on boards. The manager instituted a minimum of 15% female representation on company boards in Japan, leading to an increase in director oppositions of 20 percentage points against 2020. In Europe, Australia and New Zealand and South Africa, where a 30% threshold is applied, around a third of companies met the required number, with 27% of US firms making the grade. BNP Paribas will vote against all male directors at firms which fail to meet the threshold. Over the course of the year, 36 engagements were carried out with companies on board gender diversity, resulting in 13 firms adopting changes to meet BNP Paribas’ voting policy requirements.

Bobby Kotick, CEO of controversial gaming giant Activision Blizzard has said he will not stand for re-election on the Board of Directors at Coca-Cola. In a statement, Kotick said: “I have decided not to stand for re-election to The Coca-Cola Company board in order to focus my full attention on Activision Blizzard at this pivotal time as we prepare for our merger with Microsoft.” The company behind Candy Crush and Call of Duty is currently facing a raft of accusations from employees on gender discrimination and was last year hit by a lawsuit filed by a California state department and an investigation by the US Securities and Exchange Commission.

On Friday, CalSTRS’s board voted to oppose a bill that would require the pension plan – alongside CalPERS – to divest from current fossil fuel investments by July 1, 2027, according to Pensions & Investments. The bill is currently before two California Senate committees.

250 Chinese companies with listings in the US facing being removed unless they meet auditing rules, Gary Gensler, Chair of the US Securities and Exchange Commission (SEC) has said. Speaking to Yahoo Finance, Gensler said that as it stands the companies face being delisted by as early as 2024, unless Chinese officials allow the auditors of these companies to be inspected by the US’ Public Company Accounting Oversight Board (PCAOB). In 2020, US Congress set a three-year clock for China to allow PCAOB to audit its auditors, something Gensler said over 50 other jurisdictions allow it to do since legislation was passed over 20 years ago.