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.
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.
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
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.