April 22, 2021 | Editor: Martin Wennerström
Shell shareholders to vote on zero-carbon strategy
Royal Dutch Shell’s May 18 AGM agenda includes an advisory vote on the company’s “Energy Transition Strategy,” which sets a goal of net-zero emissions by 2050. This ultimate target is preceded by several intermediate targets to reduce the firm’s scope 1-3 net carbon intensity, relative to 2016 levels. Going forward, shareholders will have a triennial advisory vote on the updated strategy and an annual advisory vote on the firm’s progress toward that strategy. The board nevertheless opposes a separate shareholder proposal calling for Paris-aligned emissions reduction targets, describing this resolution as “unnecessary” in light of its own proposal. In order to align executive incentives with these targets, Shell will link executive bonuses to a 15%-weighted “progress towards energy transition” criterion and retire a performance criterion measuring production and LNG liquefaction volumes. Shell has adopted a multipronged approach to reaching these targets, citing all of the following as 2030 milestones: operational efficiency, low-carbon power, carbon capture and storage, a shift toward natural gas, low-carbon fuels, and natural carbon sinks.
WSJ | Shell (1) | Shell (2) | Shell (3) | S&P Global
Toshiba’s CEO resigns amid buyout talks
Toshiba Chairman Satoshi Tsunakawa has replaced Nobuaki Kurumatani as the company’s CEO. The change occurred against the backdrop of a potential USD 20 billion buyout offer from Kurumatani’s former employer, CVC Capital Partners. Toshiba’s board had previously described the proposal as insufficiently detailed and “completely unsolicited,” while noting that it would require a “substantial amount of time…for consideration.” Following the departure, CVC signaled that it would indefinitely postpone the submission of a formal offer, reportedly to give the “new leadership…time to settle in.”
Toshiba (1) | Toshiba (2) | Toshiba (3) | Nikkei | Reuters (1) | Reuters (2)
Veolia and Suez agree on merger terms
On April 11, Veolia and Suez announced a merger deal, with Veolia agreeing to a payment of EUR 12.8 billion (EUR 20.50 per share) for the remaining 70% of Suez that it does not already own. The agreement, which ends months of taut negotiations between the two rivals, is expected to create a “global champion” in waste and water services with annual revenues of up to EUR 37 billion. Furthermore, the deal includes job guarantees for a period of four years and allows for the spin-off of a new Suez company mainly consisting of Suez’ French water business. The two companies are expected to enter into a definitive agreement by May 14.
Reuters | Suez | Veolia | Bloomberg |
Tencent Music appoints new CEO and Chairman
Tencent Music Entertainment Group (“TME”) has announced changes to its top leadership structure. After five years on the board, Tong Tao Sang will step down and turn over his role as Chairman to CEO Cussion Kar Shun Pang. Furthermore, TME has appointed Zhu Liang as the new CEO, replacing Pang effective April 15. Zhu Liang had served prior to this appointment as the Vice President of controlling shareholder Tencent Holdings (55% ownership), which controls the music streaming firm through a dual-class share structure. While down 8% year-to-date, the price of TME’s American Depositary Receipts has increased by nearly 66% over the past twelve months.
Tencent Music | Reuters | Market Watch
Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.