ESG & DE&I

Engagement on governance issues higher but has lower impact on downside risk than environmental or social issue engagement Companies engaging in ESG-related conversations can mitigate and reduce theirdownside risks, according to astudy published in the Review of Financeby the Oxford University Press. The argument, framed within a context of the increasing recognition of the importance of ESG factors in investment decision-making, highlights that engagement on ESG issues can yield tangible benefits for investors by lowering afirm’sdownside risks. It states:‘Institutional investor engagement on ESG issues has become increasingly prevalent in financial markets. A primary goal of these engagements is to engender…

Proponent concerned about supplies of low-carbon materials and deforestation A shareholder proposal asking Lockheed Martin Corporation to explain how it plans to cut greenhouse gas (GHG) emissions, including those classified as Scope 3, has attracted significant – though not majority – support at the aerospace and defense company’s AGM. The resolution, filed by As You Sow, does not name Scope 3 directly but asks that Lockheed Martin’s board release a report ‘disclosing how [the company] intends to reduce its full value-chain emissions in alignment with the Paris Agreement’s 1.5°C goal.’ According to an SEC filing, it received support from 32.2…

Almost a third of votes cast back the resolution Editor’s note: In this month’s episode of the Governance Matters podcast, Bruce Goldfarb, president and CEO of Okapi Partners, discusses lessons for boards and governance professionals from two of the most high-profile proxy contests of the year, involving The Walt Disney Company and Starbucks. Click here to download. This article discusses the investor relations implications This is the end of a ‘clash of the titans’ saga. Disney and its CEO Bob Iger have prevailed in their fight against Nelson Peltz and his activist fund Trian Partners. According to Disney’s press release,…

This week’s governance, compliance and risk-management stories from around the web – CNBC reported that Norges Bank Investment Management (NBIM) says it will continue to advocate for investments based on ESG factors despite political backlash. Analysts expect the outcome of this year’s US presidential election to determine whether the pushback against ESG investment strategies will have a deep and lasting effect. Nicolai Tangen, CEO of NBIM, said the sovereign wealth fund continued to push for the ESG agenda. ‘We think it is part of long-term investing,’ he said. ‘You really need to care [about] the impact companies have on the…

Ipsos research notes that younger generations are most pessimistic about tackling climate change Monday this week was Earth Day, the annual event focused on showing support for environmental protection. This year’s celebration appears to have passed with a little less fanfare, at least from the perspective of my inbox. There are notably fewer people getting in touch wanting to talk about their new ESG or sustainability initiatives than I remember from previous years. But what does the bigger picture look like? Market research firm Ipsos carries out a survey every year around Earth Day to look at global attitudes toward…

Investors need less data, more focus, says Dr William Cox A current study of ESG reporting by 4,500 US and European companies finds between 50 percent and 75 percent of 2022 ESG data reported was unnecessary to comply with regulations and satisfy the guidelines of relevant investment funds. Yet companies are outdoing each other in producing sustainability reports of 200-300-pages, which makes it difficult for investors to wade through the data noise. The average listed company spends $675,000 annually on ESG data and ratings, with asset managers shelling out $1.4 mn, according to a survey by the SustainAbility Institute by…

Canadian financial services company uses tool to decide which ESG ratings and rankings to focus on How should companies divide their time among the hundreds of ESG ratings, rankings and assessments that request their attention? At Sun Life, the Canadian financial services firm, the sustainability team has come up with a solution: an ESG prioritization tool that ranks providers into different categories. Alanna Boyd, senior vice president and chief sustainability officer at Sun Life, tells Governance Intelligence sister publication IR Magazine the tool is expected to free up around ‘400 hours’ a year of internal staff time, which can be…

This week’s governance, compliance and risk-management stories from around the web ‒The Wall Street Journal (paywall) reported that the Public Company Accounting Oversight Board (PCAOB) issued two proposals that would require audit firms to disclose metrics on the involvement and turnover of their auditors and provide new details on fees and cyber-security vulnerabilities. Audit firms at present must publicly identify the lead partner on the audits they perform and the other firms that helped with that work. Firms also share information each year such as a list of their public company audit clients and the addresses of their offices. Some…

New report examines voting patterns of big money managers that have exited or scaled back involvement in prominent climate-activist coalition ‘Investor relations professionals shouldn’t think there’s been a loss of momentum in terms of how managers are approaching climate,’ says one sustainability expert, talking about the significance, in recent months, of some top-name investment managers exiting the Climate Action 100+ (CA100+) pressure group. Instead, he says the move signifies ‘an evolution of the [climate] approach’ as certain money managers hone in on exactly what they’re looking for when it comes to ESG. ‘US managers in particular are becoming a lot…