Governance in Brief – May 20, 2021

Posted on May 20, 2021

May 20, 2021 | Editor: Martin Wennerström

 

Mizuho to halt new financing of thermal coal mining

Mizuho Financial Group, Japan's third largest bank by assets, will cease financing new thermal coal mining projects starting June 1. The updated policy complements Mizuho’s previous decision, prompted by environmental concerns, to halt the financing of mining projects that access coal through mountaintop removal. The firm’s recent policy update comes after Prime Minister Yoshihide Suga declared that Japan plans to reduce its greenhouse gas emissions by 46% by 2030, compared to 2013 levels. The 46% target represents a significant increase from the previous 26% target announced in 2015. Notably, Japan is also aiming to achieve net-zero emissions by 2050.

Reportedly amongst the world’s top lenders to coal power plants, Mizuho has been facing growing investor pressure over coal funding. At the firm’s 2020 AGM, a proposal filed by activist group Kiko Network marked the first shareholder resolution on climate change to be put to the vote at a listed company in Japan. Despite being defeated, the resolution prompted the lender to announce in April 2020 that it would stop financing new coal power projects and end all coal loans by 2050.

Reuters | MOFA | Mizuho | S&P

 

Leonardo shareholders oppose liability action against the CEO

Shareholders at Leonardo’s 2021 AGM rejected a resolution filed by activist investor Bluebell Partners for a liability action against CEO Alessandro Profumo. Bluebell had requested damages after a court last year sentenced Profumo for false accounting while serving as the Chairman of Banca Monte dei Paschi di Siena. Bluebell argued that Profumo was unfit for his position and that the firm had suffered reputational damage following his conviction. Proxy adviser ISS had recommended that shareholders oppose the motion, citing "the absence of a sufficiently compelling rationale" and the possibility of the sentence being overturned.

Leonardo | Nasdaq | Reuters


AstraZeneca shareholders revolt over pay increase

Nearly 40% of votes at AstraZeneca’s 2021 AGM were cast against the revised remuneration policy, which increased the CEO’s maximum annual bonus for 2021 from 200% to 250% of base salary and the value of his performance share awards from 550% to 650% of base salary. Following the AGM, AstraZeneca’s board pledged to address shareholder concerns while defending the increase, arguing that its executive remuneration had fallen behind that of industry peers. Notably, in 2020, Soriat earned a total payout of GBP 15.4 million. Nonetheless, the firm is facing legal action from the European Union over delayed vaccine supply and concerns over blood clots risks. 

Reuters | Guardian | CNBC | AZ

 

New Malaysian CG code proposed 

The Securities Commission Malaysia (“SCM”) has updated the Malaysian Code on Corporate Governance “to promote board leadership and oversight of sustainability”. The revised code underlines the need for companies to address ESG risks. It also recommends that active politicians not be appointed to the board and that independent directors with a tenure exceeding nine years be elected via a two-tier voting process. Additionally, SCM reported that Bursa Malaysia will introduce a 12-year tenure limit for independent directors. The 2021 revision also expands the existing recommendation for boards to include at least 30% women, so that it will henceforth apply to all listed companies.

SCM | Mondaq | Meyer Brown