RI ESG Briefing, May 14: ExxonMobil hits back at ISS vote recommendation

Environmental

The World Bank has agreed to set up a global index of the business environment for energy, to improve opportunities for investments in renewable energy, energy efficiency and energy access. It would come under the Program for Scaling Up Renewable Energy in Low Income Countries (SREP). The primary audience for the index would be policy makers, development institutions – with the secondary audiences to include investors (it’s envisioned the index could be used as an initial filter to help identify investment opportunities), service providers, academics, civil society, and the media. Link

A community funded wind farm has been opened in Scotland. The £15.6m, four-turbine Neilston Community Wind Farm was unveiled by Deputy First Minister Nicola Sturgeon. Residents of the town bought a 28% share in the wind farm with partners Carbon Free Developments. The arrangement is the first of its kind in Scotland and will give the village of Neilston around £10m of income over the lifetime of the project. Link

Social

The public comment period on the Investor Network on Climate Risk’s proposed sustainability disclosure listing standard for global stock exchanges has been extended to May 30 due to “strong investor interest and numerous requests for additional time”. Investors now have until May 30 to review the paper and comment on its recommendations for integrating environmental, social and governance (ESG) disclosure requirements into listing rules for U.S. and global stock exchanges.

The US regulator, the Securities and Exchange Commission, has announced its first non-prosecution agreement (NPA) with a company – fashion firm Ralph Lauren – over the Foreign Corrupt Practices Act (FCPA). The agreement centred on allegations that the firm violated the FCPA when its Argentine subsidiary allegedly paid bribes to government and customs officials to improperly secure the importation of Lauren’s products into Argentina. The NPA in this case resulted from Lauren’s prompt self-reporting and extensive cooperation, said law firm Skadden, Arps, Slate, Meagher & Flom.h6. Governance

Oil major ExxonMobil has rejected governance advisory firm ISS’s recommendation on executive pay ahead of its annual meeting on May 29 in Dallas. The company says ISS’s advice has “key flaws” such as an emphasis on short-term performance and a “misrepresentation” of how bonuses are linked to performance.

Eight major global investors with more than $3.1bn invested in Wal-Mart have issued a memo in support of their shareholder proposal on executive pay clawbacks at the retail giant’s annual meeting on June 7. The investors include the UAW Retiree Medical Benefits Trust, the Connecticut Retirement Plans and Trust Funds, the Illinois State Board of Investment, Amalgamated Bank LongView Funds, Sweden’s AP1, AP3 and AP4 and F&C.

A petition calling for the SEC to develop rules requiring public companies to disclose their political spending has now attracted more than half a million comment letters. The initiative is being headed by Harvard Professor Lucian Bebchuk and Robert Jackson of Columbia Law School, who co-chaired the Committee on Disclosure of Corporate Political Spending. They wrote: “To our knowledge, the petition has attracted more comments than any other SEC rulemaking petition…in the history of the SEC.”

UK-based bank Barclays has reportedly won the dismissal of a US lawsuit relating to the Libor scandal that had been brought by shareholders led by the Carpenters Pension Trust Fund of St. Louis and the St. Clair Shores Police & Fire Retirement System. US District Judge Shira Scheindlin in Manhattan said investors in the bank’s American depositary shares failed to show that the company misled them about the matter. Link

Proxy firm Glass Lewis has recommended that shareholders in investment bank Goldman Sachs should vote against its executive pay plan due to a “disconnect between pay and performance”, according to reports. The firm also advised voting against the re-election of James Johnson, head of the board’s compensation committee and ex-head of mortgage giant Fannie Mae. “The company has been deficient in linking executive pay to corporate performance,” Glass Lewis said.