RI ESG Briefing, July 8: European Parliament votes for country-by-country corporate tax reporting

Environmental

A carbon recycling firm backed the New Zealand Superannuation Fund has reportedly narrowed its losses and is nearing commercialisation. The New Zealand Herald reported that LanzaTech reported a loss of NZ$34.7m (€21.1m) in calendar 2014, smaller than the loss of $40.5m in the prior year. NZ Super put US$60m into the firm – which turns waste gas from steel mills into high value fuels – it added. Revenue rose to NZ$8.5m from NZ$5.7m.

Campaign group BankTrack has launched an international push calling on all banks to end coal financing ahead of Paris climate summit later this year. The Paris Pledge campaign is coordinated by BankTrack, the bank campaign organisation, and is supported by over 40 environmental and campaigning groups including Avaaz, Friends of the Earth US, Global Justice Now, Global Witness, Greenpeace International, Market Forces, Rainforest Action Network and the Sierra Club.

America’s “Divest-Invest” initiative, whereby investors pledge to gradually divest from fossil fuels and re-allocate the proceeds to renewable energy, now numbers more than 100 foundations and trusts with around $5bn (€4.5bn) in assets. According to the website RTCC, 18 more US-based investors have joined Divest-Invest, among them the Roddick Foundation as well as the Mark Leonard and Ashden Trusts. They join the ranks of the $866m Rockefeller Brothers Fund, the Ben & Jerry’s Foundation and the Wallace Global Fund. The latest signatories cited fears that fossil fuel assets would decline in value as one reason why they joined Divest-Invest. Link

The London Stock Exchange has launched a range of new segments on its fixed income markets dedicated to the issuance of green bonds. The City of Gothenburg is the first issuer to use the new segment with its recent SEK1.05bn (€111m) green bond issue. The organisation has also moved their existing green bonds into the same segment for trading, the exchange said.

Social

UK banking giant Standard Chartered has embraced the so-called ‘Soft Commodities Compact,’ meaning that by 2020, the bank pledges to help eradicate all deforestation in its supply chain. The announcement was made late last week at a meeting hosted by the Prince of Wales, who brought together business leaders to move from commitments to action on removing deforestation from commodity supply chains. According to Standard Chartered, its decision to adopt the Compact means that around 20% of the market for agricultural commodities financing is aligned behind the Compact’s goal of zero deforestation.h6. Governance

The European Parliament has today (July 8) voted in favour of country-by-country reporting by listed companies on profits made, tax paid on profits and public subsidies received. The Parliament said its plenary session approved amendments to draft rules intended to boost transparency and foster shareholders’ long-run commitment to companies as part of the revision to the Shareholder Rights Directive. It also voted to empower shareholders to vote at least every three years on directors’ pay. “The vote is an important step forward in order to steer companies and investors towards long-term oriented decision making and to ensure more transparency in the governance of European companies and engagement of institutional investors and asset managers,” said ‘rapporteur’ Sergio Cofferati. MEPs have decided to enter into informal talks with member states with a view to seeking agreement on the final version of the legislation.

The Taiwan Stock Exchange (TWSE) has launched a new governance index. The TWSE Corporate Governance 100 Index first selects listed companies that meet the liquidity criteria, score in the top percentile on the Corporate Governance Evaluation System (CGES) and those with the book value per share not lower than par value. Finally, these companies are ranked based on net profit after tax and revenue growth rate of the past year, selecting the top 100 to be constituents, the TWSE stated.

The California State Teachers’ Retirement System (CalSTRS) has issued guidelines for what it considers the composition of a high-performing corporate board of directors. “Independent leadership, diversity, board succession planning and accountability measures” are among the factors the fund outlines. CalSTRS says the two-page document offers insight into what institutional investors are looking for in a quality corporate governance structure. “We think these best practices will help corporate leaders decide how best to structure their boards to optimize long-term corporate performance,” said CalSTRS Corporate Governance Director Anne Sheehan.

Corporate governance activist James McRitchie says he plans to go ahead with his ‘proxy access’ proposal at Whole Foods, even though the US retailer has informed him that its board has adopted new bylaws and asked him if he wants to withdraw his proposal. The issue has prompted intervention from the SEC and McRitchie discusses the issue at length on his blog, saying: “For the reasons stated above, my inclination is to press forward with the proposal as submitted.” Though he asks his readers whether there is anything to be gained by withdrawing the proposal? “What am I missing? Please advise.”