March 16, 2023 | Editor: Martin Wennerström
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. Specific topics include appropriate governance and accountability structures, linking senior management compensation to the achievement of climate goals, the implementation of a climate transition plan, the integration of climate-related risks into institutions’ risk management and monitoring frameworks, and the use of a climate scenario analysis. The guidelines will apply to banks and internationally active insurance groups headquartered in Canada as of year-end 2024 and other federally regulated financial institutions as of year-end 2025.
OSFI | Lexology | ESG Today | Reuters
Top shareholder exits Credit Suisse position
Credit Suisse’s longtime top shareholder Harris Associates has reportedly sold its entire stake in the Swiss bank following a sharp fall in share prices and the exodus of major clients. The move comes after the U.S. value investment firm nearly doubled its holding of Credit Suisse’s stock to more than 10% last July before cutting its stake in the wake of the bank’s 4 billion Swiss francs (USD 4.3 billion) capital raising used to facilitate its revamp. Harris Associates CIO David Herro criticized Credit Suisse's radical restructuring, which included the spin-off of its investment bank. The Saudi National Bank is now Credit Suisse's largest shareholder, with a 9.9% stake.
Bloomberg | Reuters | Seeking Alpha
EU watchdog targets diversity
gaps in banking sector
The European Banking Authority (“EBA”) has announced that it will take action against banks and investment firms that have not implemented a policy to include more women in boardrooms. The regulator has required European banks to have diversity policies since 2014, but around 27 % of the nearly 800 firms it surveyed still lack one. In addition, the EBA found that women accounted for just 18% of executive and 28% of nonexecutive directors. The survey also showed that women earned on average 9.5% less than male executive directors, and 6% less than male nonexecutive directors. Last year, the EU approved a law requiring companies to have 40% of non-executive board members be women by mid-2026.
EBA | Responsible Investor | Reuters
New Société Générale CEO reshuffles executive team
Société Générale’s incoming CEO Slawomir Krupa will slash the number of top executives at the French bank by half as part of a broader reshuffling of senior management. Krupa, who currently heads the group’s corporate and investment banking, will be replaced by Anne-Christine Champion, a key executive from French rival Natixis, and Alexandre Fleury, who will both become co-directors of global banking and investor solutions. In addition, the number of top executives at France's third-largest bank will drop from 27 to 13, with seven of the 13 executives being women. All appointments are to take effect from the company's AGM, which is scheduled for May 23.
Reuters | SG | MarketWatch | FN London
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.
Governance in Brief – February 23, 2023
SEC considers changes to climate disclosure rules The U.S. SEC is reportedly considering easing a set of proposed rules, released in March 2022, which would have required public companies to make disclosures about their greenhouse gas emissions (“GHG”), climate-related financial metrics, and climate-related risks.