RI ESG Briefing, October 17: BHP climate lobbying resolution gets 22% support

The latest sustainable finance developments

Environmental

BHP: 22% of shareholders supported the climate lobbying resolution at the mining firm’s annual meeting today in London. The vote, however, is not final until the conclusion of the Anglo-Australian firm’s Sydney AGM on November 7. Last week the Church of England Pension Board (CEPB) criticised proxy firms ISS and Glass Lewis for not supporting the proposal it co-filed at the miner and called upon the Principles for Responsible Investment (PRI) to convene a meeting to discuss the issue.

Another climate lobbying resolution due to be voted this week at Origin Energy’s AGM was withdrawn after the Australian energy giant made additional disclosures on its trade associations in a filing. Dan Gocher, Director of Climate and the Environment at the resolution’s filer, campaign group ACCR called it a “welcome first step”. But none of the four other ESG resolutions filed at Origin by the ACCR received more than 8% support from shareholders at the company’s annual meeting on Wednesday. Brynn O’Brien, ACCR Executive Director, heaped scorn on the 5.52% support for the resolution on informed indigenous people’s consent in relation to Origin’s fracking activities in the Beetaloo Sub-Basin in Australia’s Northern Territory, writing on Twitter “shame on Australian ‘responsible investment’”. She also labelled the 7.9% support for the Paris targets resolution “another indictment of responsible investment in Australia”.

Swedish state fund Sjunde AP-fonden (AP7) has published its latest theme report on water, based on work it has done over the last few years. In its report of nearly 300 portfolio companies deemed to have “high water risks”, it found that “holistic perspective” is often lacking when it comes to managing water resources.

The governor of the Banque de France, François Villeroy de Galhau, has said “green quantitative easing” has limitations in a speech reflecting on proposals to allow monetary policy to help finance a low-carbon transition. Speaking at the World Conference of Banking Institutes, Villeroy de Galhau also said climate-related risks needed to be integrated into the assessment of collateral frameworks for banks.

Italy’s Generali has launched a green bond, a first for the insurance group and a first for the European insurance market. The bond is in line with Generali’s new green bond framework and received a second party opinion
from Sustainalytics.

New Zealand’s Financial Markets Authority (FMA) has launched a consultation on green bonds and responsible investment. The FMA says consultation responses will initially be used to help it develop guidance for issuers of green bonds, and separately online material for investors on responsible investment.

Social

The Church of England Pension Board (CEPB) joined with non-profit Influence Map and consumer goods giant Unilever to present to a group of progressive Japanese companies on climate lobbying. CEPB is a signatory and Influence Map is a data provider to the global climate engagement initiative Climate Action 100+, which engages with the largest emitting companies globally, including Unilever.

A new academic paper investigates the divergence of ESG ratings of five prominent agencies. The paper from the Massachusetts Institute of Technology looks at raters difference in measurement, weight and importance they give to ESG categories and what ESG categories they analyse.h6. Governance

The Council of Institutional Investors (CII), the US investor group, sent a letter co-signed by 60 public and union pension funds, religious orders, hedge funds, mutual funds, other asset managers and investor organizations urging the Securities and Exchange Commission not to saddle proxy advisors with requirements that would reduce independence, effectiveness and competition in the field. The signatories are concerned that the guidance and interpretation issued will increase litigation, staffing and insurance costs for proxy advisors that will be passed on to institutional investors and retail shareholders.

Investor groups have launched a new website, the Investor Rights Forum, which explains risks to the shareholder proposal process, and provides research and case studies on the value of shareholder proposals. The sponsoring organizations are US SIF, the Interfaith Center on Corporate Responsibility and the Shareholder Rights Group, with support from CII. The Investor Rights Forum says that the shareholder proposal rule is “not broken,” so “don’t ‘fix’ it.”

Harvard Management Company (HMC), the endowment managing $34bn, has joined Climate Action 100+, the investor initiative targeting high emitting companies. The Harvard Gazette reports that HMC plans to engage with oil and gas companies, utilities as part of the investor-led initiative.

New York City Comptroller Scott Stringer has announced the third stage of his ground-breaking Boardroom Accountability Project: an initiative calling for companies to adopt a corporate version of the National Football League’s so-called Rooney Rule to promote gender & ethnic diversity in the boardroom. The Rule – named after former Pittsburgh Steelers owner Dan Rooney – requires NFL teams to interview ethnic-minority candidates for head coaching and senior football operation jobs.

CalSTRS, the New York State Teachers Retirement System (NYSTRS) and the Florida Retirement System (FRS) own approximately 6.23m shares of Hangzhou Hikvision, a Chinese surveillance systems provider that has been blacklisted by the US government according to Reuters. Last week, Hikvision was added to the so-called Entity List by the US Commerce Department for aiding a state-led crackdown on the minority Muslim Uighur population in Western China.

The Abu Dhabi regulator is working on a UAE wide sustainable finance taxonomy. Steve Barnett, executive director at Abu Dhabi Global Market, said it was part of work of a new Abu Dhabi Sustainable Finance Forum and that it was working with figures such as the Climate Bonds Initiatives and China’s Dr. Ma Jun. He was speaking at the World Conference of Banking Institutes in London. He told RI the sustainable finance forum included sovereign wealth funds and international banks.

The World Business Council for Sustainable Development (WBCSD), the corporate sustainability body, has called on regulators and standard setters to simplify and align the corporate reporting landscape. The call comes in the seventh edition of Reporting matters, the body’s annual review of member companies’ sustainability and integrated reports in partnership with Radley Yeldar (RY).