March 24, 2022 | Editor: Martin Wennerström
Shell directors face legal action over climate change
Environmental law charity ClientEarth is preparing legal action against the directors of Shell over the company's climate transition plan. ClientEarth wishes, in its capacity as a shareholder, to hold the directors personally liable for having breached their legal duties by mismanaging climate risk. The nonprofit argues that the firm’s climate plan, which it describes as “fundamentally flawed” and misaligned with the Paris Agreement, jeopardizes long-term value creation by exposing the firm to climate risk. Further, the group claims that Shell’s interim targets are not conducive to its target of net-zero emissions by 2050, that Shell’s strategy would raise net emissions by 4.4% by 2030, and that Shell’s carbon intensity reduction targets could be achieved despite emissions increases. ClientEarth is now awaiting the firm’s response before formally filing suit.
CNBC | ClientEarth (1)| ClientEarth (2)| ClientEarth (3)| EcoWatch|Reuters| Shell|
Investors push for Starbucks neutrality on unions
A group of institutional investors are urging Starbucks to adopt a global neutrality policy towards worker unionization. The group, which collectively holds USD 1.2 billion in Starbucks stock, is requesting that the firm reach “fair and timely” collective bargains with these workers and shift away from anti-union communications towards a “more collaborative and mutual relationship.” The investors argued that an anti-union position may damage the firm’s reputation amid growing pro-union public sentiment. A Starbucks union recently filed a complaint with U.S. authorities over the firm’s alleged retaliation against pro-union workers.
TotalEnergies is facing shareholder pressure to exit Russia in response to that nation’s ongoing invasion of Ukraine. In a letter to the board, activist investor Clearway Capital called for the firm to discontinue purchases of Russian hydrocarbons and to completely withdraw from its Russian operations, arguing that the risks and stigma associated with business in Russia outweigh the benefits. Notably, while TotalEnergies has halted new investments and suspended oil purchases, it retains its stake in gas producer Novatek. In case the firm does not comply, Clearway said it will seek shareholder support to file a joint resolution at the upcoming May AGM.
New Dutch Code demands diversity and inclusion policy
Dutch regulators have proposed an update to the Dutch Corporate Governance Code, with an open consultation period running until April 17. Per the proposal, companies will be required to implement a diversity and inclusion policy and to formulate an ESG strategy as part of the long- term value creation. Further, in alignment with amended legislation, the Code explains that the remuneration report should describe how the remuneration policy leads to long-term value creation and accounts for the company’s ESG objectives. Guidance for calculating the CEO pay ratio is also included in the Code’s explanatory notes.
Governance in Brief – June 1, 2023
Citigroup to IPO Banamex after Mexican gov’t interventions hamper sales deal Citigroup has announced a plan to spin off its Mexican business, Banamex, after a failure to sell the unit to conglomerate Grupo Mexico. Citigroup had been in talks with German Larrea, CEO and Chairman of Grupo Mexico, for over a year in an attempt to orchestrate the sale of the bank, which was first announced at the start of 2022.
Governance in Brief – May 25, 2023
Activist investor pushes for leadership and strategy changes at NRG Energy Activist investor Elliott Investment Management has disclosed a 13% stake in the US-based NRG Energy and called for leadership and operational changes at the company to remedy its “meaningful underperformance.” The investor urged NRG to add independent directors with experience in the power and energy sector to its board, noting that it has already identified five executives to guide the operational and strategic changes.
Governance in Brief – May 19, 2023
EU court sides with Ryanair on Lufthansa’s 2020 bailout. The EU General Court, the second-highest court in the EU, has annulled the European Commission’s decision on the approval of state bailout for Deutsche Lufthansa prompted by the 2020 pandemic. The judgment found the EC erroneously considered that Lufthansa could not obtain financing on the markets and failed to ask for the implementation of an incentive mechanism for the airline to buy back the German Government’s stake.
Governance in Brief – May 11, 2023
JPMorgan Chase takes over failed First Republic Bank JPMorgan Chase has acquired the assets and deposits of First Republic Bank after California authorities seized and auctioned the troubled lender. The Federal Deposit Insurance Corporation (“FDIC”), an independent governmental agency established to maintain financial stability through the insurance of banks’ deposits, took possession of First Republic Bank after the lender suffered a severe liquidity crisis following the failure of SVB and Signature Bank earlier in March.