RI ESG Briefing, April 9: Ethos advises voting against board remuneration at Credit Suisse

The round-up of the latest ESG market developments


Munich Re’s chief climatologist, Ernst Rauchm, has warned that increasing insurance premiums as a result of climate change may become a “social issue” in an interview with the Guardian. The German reinsurer has released a report concluding that the recent California wildfires were spurred by the effects of climate change.

Bank of America has announced the allocation of an additional $300bn through its Environmental Business Initiative to accelerate the transition to a low carbon economy, bringing its total commitments to $445bn. The capital will be mobilised through lending, investing, capital raising, advisory services and developing financing solutions

The Austrian Catholic Church has reportedly announced a complete divestment of all businesses involved in the extraction or production of coal, oil or gas, a decision which would affect all institutions under their purview, including dioceses and parishes, over the next five years. Companies involved in coal mining and fracking has already been removed from its portfolio.

The Christian Social People’s Party (CSV), Luxembourg’s main opposition party, has proposed a bill to reduce the subscription tax for green and sustainable funds to 0.01%, from the current rate of 0.05%. However eligible funds must also provide details proving its sustainability credentials. The party has also proposed that the finance ministry should be assisted by a commission for sustainable finance which includes a representative of the youth ministry.

Trustees of the Parliamentary Contributory Pension Fund (PCPF), the £700m DB pension scheme for UK MPs, are “reconsidering funding guidelines to recognise the risks from climate change” according to The Guardian. This will include the drafting of both a climate change policy and a “responsible business plan”, and an update to its statement of investment principles by October. The development is a victory for a cross-party coalition of MPs who have campaigned for fossil fuel divestment.


Greeta Aiyer, President and Founder of Boston Common Assets, and Matthew Patsky, CEO of Trillium Asset Management, have penned an op-ed urging Boston’s divestment of the prison industrial complex – parties with commercial interests in mass incarceration and surveillance. The Boston City Council discussed the issue at a hearing in February.

Hong Kong’s Securities and Futures Commission is circulating a survey among all licensed asset managers to ascertain the level of environmental and climate change integration in “their investment and risk management processes, post-investment ownership practices and disclosures”. The survey will also gauge their expectations for corporate ESG disclosures. A similar survey will be launched for asset owners, with PwC acting as the consultant for both surveys.h6. Governance

Swiss governance advisory firm Ethos has advised opposing all proposals related to the remuneration of the board of directors and the executive management of Credit Suisse, saying executive management’s variable remuneration is “excessive in light of the bank’s financial results”. The bank holds its AGM on April 26

Rhode Island Treasurer Seth Magaziner has capped off a shareholder engagement exercise with Mastercard Inc after the credit card provider agreed to disclose its lobbying expenses. The Treasurer had previously submitted a shareholder proposal requesting disclosures of payments for direct or indirect lobbying including to trade and grassroots organisations.

Union Invest, Germany’s third largest asset manager with €323bn in assets under management, has reportedly divested Vale debt and equity after the collapse of a tailings dame in Brazil which killed more than 220 people, the second such incident since 2015 involving Vale. The announcement comes after a group of 96 investors gave 683 listed extractives companies 45 days to disclose all the tailings storage facilities under their purvey. This “urgent global engagement” is led by the Church of England Pensions Board and the Swedish Council of Ethics of the AP Funds

The European Commission’s Directorate-General for Financial Stability and Capital Markets (DG FISMA) has reportedly initiated
an infringement procedure against 17 EU member states over the implementation of the IORP II pension directive after the transposition deadline lapsed on January 31.
The Australian Centre for Corporate Responsibility (ACCR) has announced that it will ramp up its scrutiny of anti-climate action lobby groups in the build-up to the federal elections in May. The influential Australian shareholder advocacy group is calling for support in its push, requesting that any media activity by such trade bodies – including the Minerals Council of Australia, the Business Council of Australia, and the Australian Petroleum Production and Exploration Association – be reported to them using the twitter handle #lobbywatchAU.

Fitch Ratings has disclosed its scoring system showing how ESG affects individual credit scores for sovereigns, which comes after the ratings agency published ESG Relevance Scores for corporates and financial institutions. Fitch is the first credit ratings agency to publish opinions on the impact of ESG on credit ratings.

Three Japanese banks – Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Financial Group and Mizuho Financial Group – have had cases against them filed at the Japanese National Contact Point (NCP), the grievance mechanism under the OECD guidelines, over their financing of several Vietnamese coal power plants, which Australian NGO Market Forces argues breach the guidelines, according to OECD Watch. The complaints were filed with the NCP in September 2018 and relate to the environmental and societal impacts of the projects.