ESG round-up: New York State and City pension funds launch proxy campaign against Amazon directors

The latest developments in sustainable finance: Royal London Asset Management looks to join 18 CA100+ engagement groups, World Benchmarking alliance launches nature benchmark

New York State and City’s pension funds have written to Amazon shareholders, urging them to vote against the reappointment of two Amazon board directors responsible for human capital management, citing the company’s failure to engage over employee welfare and poor labour practices. The funds, which between them have a $5.3 billion stake in Amazon, said they had sought to meet with the leadership and compensation committee to discuss concerns over health and safety, labour practices and unusually high employee turnover but had been unsuccessful. In the letter, the funds also raised concerns over executive compensation, citing the fact that Amazon’s CEO is paid 6,474 times more than the median employee. Amazon did not respond to a request for comment.

Royal London Asset Management is looking to join 18 Climate Action 100+ engagement groups as part of its new net zero engagement programme, according to a spokesperson. The £159 billion ($205 billion; €190 billion) manager, which currently co-leads engagement with Glencore, is looking to become a co-lead on the UK’s National Grid, as well as joining 17 other engagements, mainly in the oil and gas and utilities sectors, as a supporting investor. Lead investors on engagements under the initiative are responsible for organising meetings with company management, identifying engagement priorities, and reporting on engagement progress, while supporting investors attend meetings and provide input to communications with target companies.

The World Benchmarking Alliance has launched a nature benchmark methodology designed to incentivise companies to understand where biodiversity risks are highest and act quickly to halt damaging trends. One of the key points in the methodology is the capacity to carry out a value-chain biodiversity impact and dependency assessment. This is designed to help companies develop a strategy in the area, allowing them to understand the most impacted biodiversity ecosystems and species, and then set site-level actions within a broader, higher-level target objective such as no net loss or biodiversity net gain.

ESG activist investor Clearway Capital has confirmed its acquisition of a minority stake in Irish food and nutritional products company Glanbia, following reports by Bloomberg. Last month, Clearway Capital’s founder Gianluca Ferrari told Responsible Investor that the fund had started engagement with a mid-cap investee company in the consumer space regarding plastic packaging concerns and supply-chain emissions. Launched in 2020, Clearway focuses on small and mid-cap companies in Western Europe that are lagging on environmental, social and governance issues. Glanbia has a market capitalisation of just over €3 billion.

The Russian invasion of Ukraine is likely to slow European efforts to cut emissions in the near term, but is unlikely to affect long-term ambitions to reduce carbon emissions, according to a note from Moody’s. The construction of new nuclear power plants is not seen as a viable short-term solution to replace Russian gas imports, while renewables are unable to replace gas used for heating and industrial processes. Moody’s predicts that when the initial energy crisis and focus on energy security subsides, the focus will return to clean energy and efficiency. However, a report published by DWS today claims that the EU can eliminate the need for Russian gas by 2025 without the need for additional fossil fuel infrastructure, and that the invasion of Ukraine “looks set to spur” an acceleration in EU decarbonisation and renewables growth.