RI ESG Briefing, May 3: Aviva loses non-binding remuneration vote

Environmental

The South Korean National Assembly has passed a bill to establish a cap-and- trade system to help cut corporate greenhouse gas emissions. The market-based plan requires companies exceeding their emission quotas to buy permits from those that discharge less, according to a Bloomberg report. The bill calls for emissions trading to start in 2015.

Standard Chartered (UK), Nedbank (South Africa) and the International Finance Corp. have become the latest financial institutions to sign the Natural Capital Declaration – bringing the number of backers to 20. The declaration, to be launched at the Rio+20 summit, is a statement by the financial sector committing to work towards integrating natural capital criteria into financial products and services.

The Nordic Investment Bank says it has allocated €3bn to projects promoting renewable energy, energy efficiency and other climate change adaptation measures in the four years since the launch of its CLEERE (Climate Change, Energy Efficiency and Renewable Energy) lending facility. Within the framework, the NIB has financed 84 environmental projects. And it said it has “more projects in the pipeline that promote the generation and use of renewable energy”.

People News

Philippe Aurain, Chief Investment Officer of French reserve fund the Fonds de Réserves pour les Retraites (FRR), has joined €25bn institutional funds firm Fédéris Gestion d’Actifs (FGA). FGA, the asset management arm of the Malakoff Médéric Group, offers numerous socially responsible funds and is a member of both the Forum pour l’Investissement Responsable (FIR, or French SIF) and the UN Principles for Responsible Investment. Link

Social

A proposal for the Rio+20 summit requiring companies to include sustainability information in their corporate reporting may be watered down, according to a Reuters report citing David Pitt-Watson of Hermes Focus Asset Management. The summit is set to take place in June 20-22.

Deutsche Bank has launched a new small grants scheme offering up to £2,500 (€3,072) education and community development organisations based in London, according to Civil Society. The grants will go to voluntary and community groups with an income under £150,000. Link. Governance

Insurance giant Aviva lost a non-binding vote on executive remuneration at its annual meeting today (May 3), according to the BBC. It reported that, excluding abstentions, 54% voted against the report. It follows an announcement earlier this week that CEO Andrew Moss would not take a pay rise after shareholder disapproval. And it comes after the 26.9% vote against the Barclays remuneration report last week and in the context of the Citigroup vote earlier in April.

The Monetary Authority of Singapore has accepted all the recommendations made by an expert panel about revising its Corporate Governance Code. So the revised code will come into effect from November 1. The key changes cover director independence, board composition, director training, multiple directorships, alternate directors, remuneration practices and disclosures, risk management, as well as shareholder rights and roles. Announcement

The UK Parliament’s Treasury Select Committee has published the terms of reference for a new inquiry into corporate governance in systemically important financial institutions. “The Committee will seek to address, among other things, why it was that so many experienced and technically competent non-executives – the cream of British corporate life – appeared to be asleep in some of the boardrooms of our major financial firms,” it said. Evidence is due by May 24. Link

Southeastern Asset Management, the US funds firm with $34bn in assets under management, says it will take a more “active” role in under-fire natural gas firm in Chesapeake Energy, according to reports. Southeastern, which has a 13.6% stake in Chesapeake, is the largest shareholder in the company which has been hit by reports about CEO Aubrey McClendon’s business deals.
GMI Ratings, the US-based governance research firm, has released its 2012 Preliminary CEO Pay Survey. Based on a comparison of 817 Russell 3000 CEOs, it says, figures show that the average total realized compensation for the top executives at Russell 3000 companies is $5.8m. The highest paid CEO so far is Michael Johnson of Herbalife at $89.4m.