Georgeson Monthly Roundup

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Georgeson Monthly Roundup - November 2020

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Latest Georgeson publications

Georgeson memo on ISS 2021 Policy Updates

On 12 November, ISS announced the update of its benchmark policies for the AGM season 2021. As we do customarily, we have put together a memo highlighting the most important changes to the UK & European and US policies with the aim of providing an easy and accessible tool covering what to expect from ISS in the upcoming 2021 AGM season.

Read more about the US and European updates.

Georgeson publishes Part II of its US Annual Corporate Governance Review

Following the release of Part I of our Annual Corporate Governance Review in September 2020, we are pleased to present Part II of the report. Part II offers an expanded analysis of institutional investor voting decisions on key shareholder proposals, as well as say-on-pay proposals and director elections. It also contains a critical review of M&A, proxy contests and investor activism trends from the 2020 proxy season for all U.S. companies.

Read the full report here.

Up next

Upcoming webinar: Wirecard - Dan McCrum from FT shares his story

Monday, 14 December 2020
2 pm GMT │ 3 pm CET │ 9 am ET

Join us on our webinar, when Dan will join Cas Sydorowitz, our Global Head of Activism and M&A, to recap his investigative journey over the last six years and discuss what takeaways the Wirecard story holds for issuers, investors and the market in general.

Register here.

In the media

Georgeson’s Hannah Orowitz quoted in an Agenda Weekly article entitled “E+S Proposals Get ‘More Sticky’”

Data from this year’s proxy season suggests that shareholders are increasingly confident in environmental and social (E+S) proposals they put forward. More resolutions remained on the ballot this year compared to 2019 even though the percentage of resolutions that the SEC permitted companies to omit from proxy statements also increased, according to research from ISS. Georgeson’s Hannah Orowitz, Senior Managing Director, Corporate Governance is quoted in the article saying that the SEC guidance likely drove the decreased willingness of investors to negotiate proposals off the ballot as they got a handle on what types of proposals may get around SEC no-action rules.

Read the full article here.

Georgeson’s Cas Sydorowitz was quoted in a Barron’s article entitled “Expect More ESG Activism and SPACs in 2021

The new year will also see a continuation of recent trends that have bubbled up this year. ESG-focused activism and shareholder proposals will keep rising, Sydorowitz says.

Read the full article here.

Shareholder Activism

Reuters reports that Billionaire UK investor aims to force hundreds of companies to act on climate: https://uk.reuters.com/article/us-climate-change-investors/billionaire-uk-investor-aims-to-force-hundreds-of-companies-to-act-on-climate-idUSKBN2802SN “British billionaire Chris Hohn is aiming to force hundreds of U.S. and European companies to slash their greenhouse gas emissions by enlisting global investors to demand an annual vote on their climate plans at shareholder meetings.”
The Financial Times reports that Activist fund targets St James’s Place: https://www.ft.com/content/05c75dce-5085-4ac4-a085-eeea85bc1de1 “St James's Place, the UK's largest wealth manager, has been targeted by activist investment fund PrimeStone Capital.”
Reuters reports that Activist investor Ferrari targets environment, social laggards with new fund: https://uk.reuters.com/article/uk-europe-hedgefunds-clearway-exclusive/exclusive-activist-investor-ferrari-targets-environment-social-laggards-with-new-fund-idUKKBN2870WV?il=0 “Activist investor Gianluca Ferrari, who has led campaigns against a string of mid-cap firms, is setting up a fund targeting companies lagging on environmental, social and governance (ESG) issues.”
Institutional Investor asks Has Shareholder Activism Caught the Virus?: https://www.institutionalinvestor.com/article/b1pcx5bjpvwssj/has-shareholder-activism-caught-the-virus “Proxy battles are down, while investors say “no thanks” to activist board nominees.”
Nikkei Asia reports that Activist investors promise to make life hell for Japan's CEOs: https://asia.nikkei.com/Opinion/Activist-investors-promise-to-make-life-hell-for-Japan-s-CEOs “What is becoming clear is that COVID has not changed the underlying economic drivers of Japanese activism. To the contrary, it has created irresistible economic pressures against which traditionally friendly shareholders are increasingly unwilling and unable to protect target management.”
Bloomberg opines that Billionaire Activism Is Alive and Well in Paris: https://www.bloomberg.com/opinion/articles/2020-11-10/billionaire-activism-is-alive-and-well-in-paris-thanks-to-xavier-niel “Xavier Niel’s victory in a pandemic revolt at Westfield was made easier by the shopping mall owner’s blinkered defense.”
Reuters reports that Elliott’s Swiss cookie raid merits activist slap: https://uk.reuters.com/article/us-aryzta-m-a-elliott-breakingviews/breakingviews-elliotts-swiss-cookie-raid-merits-activist-slap-idUKKBN2842FZ “Elliott Advisors is trying to raid the cookie jar. The U.S. hedge fund, led by billionaire Paul Singer, is planning a 793 million Swiss franc (733 million euros) bid for debt-laden baker Aryzta, maker of Otis Spunkmeyer biscuits. Yet with the pandemic easing, the Swiss group’s shareholders, which also include some activists, have good reason to hold out.”

Global

Morningstar reports that Investors Demanding ESG after the Pandemic: https://www.morningstar.ca/ca/news/207018/investors-demanding-esg-after-the-pandemic.aspx “Corporate responsibility's a critical ingredient for sustainable - and enhanced - returns post-pandemic, says RBC Global Asset Management.”
The Financial Times reports that CFA forges ahead with ESG standard despite criticism: https://www.ft.com/content/5430ff68-2a73-4e1b-bf40-8de6a76389a2 “Asset managers warn that body’s move is premature given different attitudes among global policymakers.”
Pension & Investments reports that ESG laggards could discover debt drying up: https://www.pionline.com/esg/esg-laggards-could-discover-debt-drying? “Investors see way to coerce those ignoring climate change.”
The ICGN has issued a view point on Integrating ESG into Executive Compensation Plans: https://www.icgn.org/integrating-esg-executive-compensation-plans “Even prior to the current crisis, many capital market participants were questioning whether there was excessive reliance on short-term financial metrics in remuneration plans. In this ICGN Viewpoint we consider afresh such questions. How can remuneration plans of senior executives be structured to promote sustainable value creation? Can this be achieved through including ESG (environmental, social and governance) metrics within their long-term incentive structure?”
Responsible Investor reports that Using estimated carbon data could lead to greenwashing, say scholars: https://www.responsible-investor.com/articles/third-party-estimated-carbon-emissions-and-ratings-no-substitute-for-reported-data-say-researchers “The conclusions were based on a study of four ESG data firms.”
The Financial Times reports that ESG falls down the investment agenda: https://www.ft.com/content/baf6a93d-9c04-4e9e-8835-97d310df0831 “Survey shows big investors have demoted environmental, social and governance issues.”
The Financial Times reports on The risks in the power of stock market indices: https://www.ft.com/content/b9b856c6-45a5-4dd6-b237-2e339acefb12 “Stock market indices are a little like the members' clubs of Mayfair — their rules of admission are strict, numbers are often limited, and companies are desperate to be allowed entry for the status that would confer."

Europe

Pan-European developments

The European Commission has launched a public consultation on Sustainable Finance and Taxonomy: https://ec.europa.eu/commission/presscorner/detail/en/mex_20_2176#3 “The European Commission has today launched a public consultation on the first two sets of criteria for determining which economic activities can qualify as environmentally sustainable, under the EU's Taxonomy.” Responses to the consultation on the draft act can be submitted until 18 December 2020 here: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12302-Climate-change-mitigation-and-adaptation-taxonomy#ISC_WORKFLOW
The Financial Times reports that Investors urge European companies to include climate risks in accounts: https://www.ft.com/content/dd01aacd-85a0-4577-9700-26f1d6fb26b3 “Coalition overseeing $9tn in assets have written to groups including Anglo American, BMW, EDF and Lufthansa.”
Responsible Investor reports that European Parliament backs sustainable corporate governance legislation blueprint: https://www.responsible-investor.com/articles/european-parliament-backs-sustainable-corporate-governance-legislation-blueprint “MEPs call for legislative proposal to define director duties on sustainability.”
The Financial Times reports on Brussels criticised for giving BlackRock sustainable finance contract: https://www.ft.com/content/44948a25-7a00-4bd4-aec8-9e80fb860461 “EU ombudsman says decision exposed weakness of commission's procedure on conflicts of interest.”

The Wall Street Journal reports that U.K. Requires Companies to Report on Climate Change by 2025: https://www.wsj.com/articles/u-k-requires-companies-to-report-on-climate-change-by-2025-11604964183 “It is the first country to make disclosures about the business impacts of climate change mandatory.” The full Government announcement can be found here: https://www.gov.uk/government/news/chancellor-sets-out-ambition-for-future-of-uk-financial-services “The UK will become the first country in the world to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures fully mandatory across the economy by 2025, going beyond the ‘comply or explain’ approach.”
The FRC has issued a statement claiming that Reporting on the new Corporate Governance Code is a mixed picture: https://www.frc.org.uk/news/november-2020/reporting-on-the-new-corporate-governance-code-is “The revised UK Corporate Governance Code provides an opportunity for companies to report to their stakeholders in a way that allows them to communicate high-quality information about the way in which their governance functions to deliver a company’s purpose and strategy. Although some companies have embraced the opportunities the revised Code offers, the FRC has found in its Review of Corporate Governance Reporting that this was not consistent across the board.” The full review can be accessed here: https://www.frc.org.uk/getattachment/c22f7296-0839-420e-ae03-bdce3e157702/Governance-Report-2020-2611.pdf On this matter, the Financial Times also reports that UK companies fall short on climate reporting, warns watchdog: https://www.ft.com/content/233c52d6-0233-4447-8316-81f383285ac1 “Financial Reporting Council says environmental disclosure needs to improve.”
The Financial Times reports that Bame appointments stall on boards of biggest UK companies: https://www.ft.com/content/310b969c-47c3-4ade-8ea9-050a34ac70bd “British groups lagging behind US counterparts on ethnic diversity.”
The Financial Times reports on Scottish Widows to dump £440m of company holdings that fail ESG tests: https://www.ft.com/content/a09a59d7-0284-4d29-a71e-37e92e5cc69a “Exclusions policy is one of the most aggressive adopted by a leading UK pensions provider.”
City AM reports that New foreign investment powers will create 'considerable uncertainty' for business: https://www.cityam.com/new-foreign-investment-powers-will-create-considerable-uncertainty-for-business/ “A new law giving the government the power to block foreign takeovers will create ‘considerable uncertainty’ for businesses, City firms have warned today.”
The IA released its 2021 Principles of Remuneration which are accessible here: https://www.ivis.co.uk/media/13885/principles-of-remuneration-2021.pdf “The impact of the pandemic on UK Plc will continue to reverberate for many years. How companies balance the need to reward and incentivise management whilst reflecting the experiences and expectations of employees, suppliers, shareholders and wider society will be crucial. IA members consider the Principles of Remuneration remain relevant through the pandemic, but we have supplemented the Principles with separate guidance which sets out member expectations on specific issues arising from the pandemic. The wider stakeholder interest in remuneration shows no signs of abating and will come into sharper focus as a result of the inequalities highlighted by the pandemic. Executive remuneration is seen by some commentators as a barometer on the state of corporate governance in the UK as a whole.” Further information about the IA's approach to Covid-19 and executive remuneration is available here: https://www.ivis.co.uk/media/13887/remuneration-and-covid-19-for-2021.pdf
Professional Pensions reports that Two-thirds of fund managers reduce investments in companies failing on diversity and inclusion: https://www.professionalpensions.com/news/4023599/thirds-fund-managers-reduce-investments-companies-failing-diversity-inclusion “63% of UK investors say they their firms are actively applying exclusionary screening based on diversity and inclusion metrics, while 64% have started to put portfolio investments that do not meet their diversity and inclusion thresholds on ‘watch lists'.”
Environmental Finance reports on Carney: AGMs could give investors 'say on transition plans': https://www.environmental-finance.com/content/news/carney-agms-could-give-investors-say-on-transition-plans.html “Mark Carney has suggested investors could be given an automatic advisory vote on companies' net-zero transition plans, similar to 'say on pay' shareholder rights to vote on executive remuneration.”
The Financial Times reports that Covid rule allowing UK companies to fast-track share issues scrapped: https://www.ft.com/content/630dcb71-d5cc-4c02-9381-4760eb21cf9c “Rights of retail investors to participate in large fundraisings will be reinstated next month.”

France

The Financial Times reports that Investors target French companies over lack of women in top jobs: https://www.ft.com/content/5a1a76f8-1629-4c46-ad2d-bd926a166bbb “Group of asset managers calls on 120 biggest businesses to make 30% of executive management teams female by 2025.”
The AMF published its Annual Report On Corporate Governance: https://www.amf-france.org/en/news-publications/news-releases/amf-news-releases/2020s-general-meetings-and-executive-compensation-amf-publishes-its-annual-report-corporate “Since the French Financial Security Act of August 1st, 2003, the Autorité des Marchés Financiers has conducted an annual review of the disclosure of listed companies with regard to corporate governance and executive compensation. This is the opportunity to issue new recommendations for companies, as well as providing new areas for discussion to reinforce best practices. The 2020’s annual report is obviously marked by the context of the health crisis, which has led the authorities to take lockdown measures.”
Reinsurance News reports that Court orders Derez and Covéa to pay €19.6mn in compensation to SCOR: https://www.reinsurancene.ws/court-orders-derez-and-covea-to-pay-e19-6mn-in-compensation-to-scor/ “Global re/insurer SCOR has announced that the Paris Commercial Court has ruled against Thierry Derez and Covéa for misconduct during the preparation and execution of Covéa’s unsolicited takeover bid for the French re/insurer.”
The HCGE publishes its 7th Annual Report (in French): https://hcge.fr/le-hcge-rend-public-son-7eme-rapport-annuel/ “The High Committee for Corporate Governance (HCGE) is today publishing its seventh annual activity report for the period from September 2019 to September 2020. […] Analysis of the governance and compensation information published in 2020 by SBF 120 companies shows that the degree of compliance with the Code's provisions continues to improve in a context of mature governance. The report explains the positions taken by the High Committee in 2020, particularly on the obligation of discretion imposed on the permanent representatives of corporate directors or on the inclusion of at least one environmental criterion in the determination of the executive's variable compensation. Finally, starting this year, following the publication of a revised version of the AFEP-MEDEF Code in January 2020, the High Committee conducted an initial analysis of the implementation of targets for increasing the number of women in management bodies and of ratios on pay differentials. With regard to gender diversity, the Committee stressed the need to plan ambitious action plans with quantified targets that include the implementation of targets for increasing the number of women at the highest levels of management. With respect to the ratios on the compensation gap, it recommends that the calculation methodology adopted be more explicit with respect to the inclusion of the compensation components selected and that the scope of the entity or entities concerned be clearly stated, together with an explanation of the reasons for this choice.”

Germany

The Financial Times reports on Germany’s blue-chip Dax to expand in wake of Wirecard debacle: https://www.ft.com/content/48cc80c3-c032-4c18-81d9-27c37ddcbe2a “Country’s benchmark stock index to increase by 10 members to 40 and apply tougher rules.”
Responsible Investor reports that Genstar makes 2.5x in 3 years as it sells ISS to Deutsche Börse: https://www.responsible-investor.com/articles/genstar-makes-2-5x-in-3-years-as-it-sells-iss-to-deutsche-boerse “Sale of US voting and ESG house to German exchange signals huge shift in EU ESG business and finance reality.”
Süddeutsche Zeitung reports on Was die neue Frauenquote für Unternehmen bedeutet (“What the new quota for women means for companies”) (in German): https://www.sueddeutsche.de/wirtschaft/frauenquote-vorstand-deutschland-1.5125167 “Women are hardly represented in German executive floors. A quota should change that now. When does the regulation apply, who is affected - and for whom there is an exception.”
Capital reports on Wie die Online-Hauptversammlung zur Dauerlösung werden kann (“How the online general meeting can become a permanent solution”) (in German): https://www.capital.de/wirtschaft-politik/wie-die-online-hauptversammlung-zur-dauerloesung-werden-kann “Listed companies will be able to hold their general meetings on the Internet in the coming year as well. But important shareholder rights are massively restricted.”
Handelsblatt reports that „Den Aufsichtsrat herumbuchsiert“: Frühere Wirecard-Aufseherin übt scharfe Kritik an Braun (“‘The supervisory board messed around’: Former Wirecard supervisor sharply criticized Braun”) (in German): https://www.handelsblatt.com/finanzen/banken-versicherungen/untersuchungsausschuss-den-aufsichtsrat-herumbuchsiert-fruehere-wirecard-aufseherin-uebt-scharfe-kritik-an-braun/26641468.html?ticket=ST-1978727-IHJBfVUUb5ruZ1RvhFPd-ap1 “In the investigation committee, Tina Kleingarn explains that she was dissatisfied with the processes in the group. The supervisory board did not adequately control the management board.”
The Financial times reports that EY faces mounting pressure to disclose Wirecard details to German parliament: https://www.ft.com/content/bd5e98c6-a029-4a65-8c71-3fe6a7784e1f “EY partners are facing mounting pressure to provide detailed evidence to Germany's parliament about a decade of their work auditing Wirecard.”
Handelsblatt reports on Streit um SAP-Aufsichtsrat: Hat ein Mitglied Stimmen gekauft? (“Dispute over SAP Supervisory Board: Did a member buy votes? ”) (in German): https://www.handelsblatt.com/technik/it-internet/softwarehersteller-streit-um-sap-aufsichtsrat-hat-ein-mitglied-stimmen-gekauft/26609080.html “A former and a current SAP Supervisory Board member are arguing in court. A lot of money is at stake - and the question of whether there was a deal with tastes.”
Handelsblatt reports that So viel verdienen deutsche Aufsichtsräte (“This is how much German supervisory board members earn”) (in German): https://www.handelsblatt.com/unternehmen/management/dsw-studie-so-viel-verdienen-deutsche-aufsichtsraete/26594200.html “According to DSW, Paul Achleitner receives almost three times the amount of the best paid chief controller of 2003. Investor protectors fear that the mandates will soon be remunerated even more.”

Netherlands

Eumedion has made a statement to the Dutch House of Representatives on the Urgent Act on Conditional Final Settlement of Dividend Taxation (in Dutch): https://www.eumedion.nl/clientdata/215/media/clientimages/Schriftelijke-inbreng-hoorzitting-TK-exitheffing-dividendbelasting-30-11-20-def.pdf?v=201127164111 “It is likely that the bill will lead to a discount on the shares of Dutch companies listed companies. It will therefore become more expensive for Dutch listed companies to refinance and make expansion investments and M&A transactions. That affects the competitiveness of Dutch listed companies.”
Bloomberg reports that Dutch Fund Manager Makes a Big Statement Against Fossil Fuels: https://www.bloomberg.com/news/articles/2020-10-28/robeco-makes-a-big-statement-against-fossil-fuels-green-insight “A no-nonsense approach to sustainable investing is emerging at Robeco, which oversees $183 billion.”

Switzerland

Swiss Info reports that Switzerland to Step Up Ethical Standards Despite Voters’ Rebuff: https://www.swissinfo.ch/eng/switzerland-to-step-up-ethical-standards-despite-voters--rebuff/46192906 “Switzerland will still up the ante on multinational corporations with new ethics standards for businesses after voters rejected a popular initiative on Sunday.”
Swiss Info reports that Shareholders call for new priorities for manager salaries: https://www.swissinfo.ch/eng/shareholders-call-for-new-priorities-for-manager-salaries/46137342 “Shareholders in Switzerland want a rethink on how managers are paid and demand that priorities regarding corporate governance, sustainability and corporate social responsibility (CSR) be redefined, a survey has found.”

Italy

Il Sole 24 Ore reports on UniCredit al lavoro sul nuovo cda. L’intreccio con il dossier Mps (“UniCredit at work on the new board of directors. The intertwining with the Mps dossier”) (in Italian): https://www.ilsole24ore.com/art/unicredit-lavoro-nuovo-cda-l-intreccio-il-dossier-mps-ADwMmp4 “The work on the renewal of the board has started with the advisor Spencer Stuart: the role of the future president Pier Carlo Padoan and the unknown factor of the CEO Jean Pierre Mustier.”
Reuters reports that France's Credit Agricole makes $875 million buyout offer for Italy's Creval: https://uk.reuters.com/article/uk-creval-m-a-creditagricole/frances-credit-agricole-offers-to-buy-italian-bank-credito-valtellines-idUKKBN2830FE “France’s Credit Agricole offered to buy third-tier Italian lender Creval for 737 million euros ($875 million) on Monday, as a wave of consolidation sweeps Italy’s banking sector.”
Forbes reports on January’s Vote to Decide on Stellantis for FCA, PSA Shareholders: https://www.forbes.com/sites/michaeltaylor/2020/11/19/january-vote-to-decide-on-stellantis-for-fca-psa-shareholders/?sh=2e5065fd4f72 “The long-planned merger to create the Euro-American automaking giant Stellantis will be voted on by Fiat Chrysler and Groupe PSA shareholders on January 4. The Stellantis merger vote, which will create the world’s fourth-biggest automaker behind the Volkswagen Group, Toyota and the Renault-Nissan Alliance, was confirmed by both FCA and PSA this morning, European time.”

Spain

El Economista reports that BBVA y Sabadell rompen las negociaciones de fusión por el precio y el poder (“BBVA and Sabadel break merger negotiations”) (in Spanish): https://www.eleconomista.es/empresas-finanzas/noticias/10912159/11/20/BBVA-y-Sabadell-dan-por-finalizadas-las-negociaciones-para-su-fusion.html “The disagreement has become official. Both banks have announced that they have not reached an agreement and that they have ended the talks. Sabadell has been the most explicit in its note to the CNMV by indicating the price of the operation as the reason for their differences.”
Diario Responsable reports on La sostenibilidad como hoja de ruta para la recuperación (“Sustainability as a roadmap for recovery”) (in Spanish): https://diarioresponsable.com/noticias/30259-la-sostenibilidad-como-hoja-de-ruta-para-la-recuperacion “Forética and the Spanish Global Compact Network (Red Española del Pacto Mundial) address the role of companies in post-pandemic sustainable recovery. The initiative developed jointly by both organizations aims to join efforts to advance towards reconstruction after the COVID-19 crisis, aligned with the SDGs and the 2030 Agenda.”
El Economista reports on Una menor transparencia salarial (“A Lower compensation transparency”) (in Spanish): https://www.eleconomista.es/opinion-blogs/noticias/10884143/11/20/Una-menor-transparencia-salarial-.html “The reform of the Spanish Ley de Sociedades de Capital in which the Government is already working threatens to reopen the old controversy, in which even the Supreme Court had to intervene, regarding the publication of the salaries of company administrators.”
El Pais reports that Rodrigo Buenaventura será el nuevo presidente de la CNMV (“Mr. Rodrigo Buenaventura will be the new Chairman of the CNMV”) (in Spanish): https://elpais.com/economia/2020-11-20/rodrigo-buenaventura-sera-el-nuevo-presidente-de-la-cnmv.html “Buenaventura, who replaces Sebastián Albella, is currently the institution's general director of Markets. It is the first time, in the 32 years of existence of the CNMV, that the Chairman has been appointed from within the house.”

Norway

The Financial Times reports on ‘There will be shocks’: Yngve Slyngstad, Norway’s $1tn man: https://www.ft.com/content/db3246a1-1a33-4448-899c-c3680a85cac1 “The investor on his time at the helm of the world's biggest sovereign wealth fund.”

North America

United States

The New York Times reports on How One Firm Drove Influence Campaigns Nationwide for Big Oil: https://www.nytimes.com/2020/11/11/climate/fti-consulting.html? “FTI, a global consulting firm, helped design, staff and run organizations and websites funded by energy companies that can appear to represent grass-roots support for fossil-fuel initiatives.”
Bloomberg reports that Hedge Funds’ Shot at Keeping Stock Investments Secret Fades: https://www.bloomberg.com/news/articles/2020-10-27/hedge-funds-shot-at-stock-secrecy-fades-as-sec-shelves-revamp “U.S. regulators are shelving a controversial plan to allow most hedge funds to keep their stock investments secret after public companies and other critics blasted the proposal as a major blow to market transparency, said people familiar with the matter.”
Barrons reports that Proxy Advisor ISS Has a New Owner in Deutsche Börse. It’s an ESG Move.: https://www.barrons.com/articles/proxy-advisor-iss-has-a-new-owner-in-deutsche-borse-its-an-esg-move-51605651577 “Institutional Shareholder Services, known for its shareholder advisory services, has a new majority owner. Deutsche Börse is buying 80% of ISS in a deal that values the firm at $2.3 billion.”
The Financial Times reports that Dorsey wins support to stay as head of Twitter after board review: https://www.ft.com/content/4a6fc60d-307a-4d78-a24e-67bf51dff8e1 “Activist investor Elliott Management had pushed for tougher performance goals.”

Canada

Bloomberg reports that Top Canada Pension Funds Ask for Better ESG Disclosure: https://www.bloomberg.com/news/articles/2020-11-25/top-canada-pension-funds-ask-for-better-esg-disclosures “The heads of eight large Canadian pension funds are pleading with companies to improve their environmental, social and governance disclosure by giving investors “consistent and complete” data. The leaders backing the initiative include the chiefs of the Canada Pension Plan Investment Board, the Caisse de depot et placement du Quebec, Ontario Teachers’ Pension Plan and PSP Investments, which manages the pensions of federal government employees and the Royal Canadian Mounted Police.”

Asia

Japan

The Japan Times reports that Keidanren sets goal for 30% of executives to be women by 2030: https://www.japantimes.co.jp/news/2020/11/23/business/keidanren-female-executives-2030/ “Japan’s largest business lobby aims to have women occupying more than 30% of the executive positions at major companies by 2030, the latest sign that the private sector is gearing up to diversify the workforce to stay competitive.”
The Japan Times reports that Tokyo finds luring business from Hong Kong may be a tall order: https://www.japantimes.co.jp/news/2020/11/15/business/economy-business/tokyo-business-hong-kong/ “Tokyo is on a charm offensive, hoping to lure firms in Hong Kong spooked by protests and a controversial security law imposed by China. But the city is proving a tough sell.”

Hong Kong

The Securities and Futures Commission (SFC) launched a consultation on proposed requirements for fund managers to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures to meet investors’ growing demands for climate risk information and combat greenwashing: https://apps.sfc.hk/edistributionWeb/gateway/EN/consultation/doc?refNo=20CP5 “Deadline for submitting your input is on or before 15 Jan 2021.”
The Financial Times reports that The Chinese party is pushing back’: why Beijing reined in Jack Ma and Ant: https://www.ft.com/content/3d2f174d-aa73-44fc-8c90-45c2a554e97b “The billionaire’s criticism of regulators triggered the move by communist leaders to limit the power of the fintech group. Mr Ma may be one of China’s richest men and its leading celebrity entrepreneur but his stinging public criticism of Beijing’s governance in a speech in October was deemed unacceptable, Chinese analysts and state bankers say.”
South China Morning Post hosted a webinar about Asia Impact: How Corporate Governance Can Make or Break Companies: https://www.scmp.com/business/banking-finance/article/3100040/governance-g-esg-critical-businesses-seeking-capital “Governance, the G in ESG, is critical to businesses seeking capital to survive coronavirus crisis and US-China conflict.”
AsianInvestors and Eastspring Investments hosted a virtual roundtable and discussed about Creating resilient Asian fixed income portfolios via an ESG lens: https://www.asianinvestor.net/article/creating-resilient-asian-fixed-income-portfolios-via-an-esg-lens/464546? “Making ESG analysis more focused and core to all investment processes is essential to overcome shortfalls in data and transparency amid growing appetite for bonds that meet sustainability goals.”
FinanceAsia and ANZ hosted a roundtable and discussed about how sustainable goals are reshaping Asia’s energy infrastructure: https://www.financeasia.com/article/how-sustainable-goals-are-reshaping-asias-energy-infrastructure/464187 “It highlighted emerging opportunities in an ever-wider variety of energy infrastructure projects across the region, led by an increasing focus on renewables amid the mantra of sustainability.”

China

Fitch Ratings says in a new report about China’s new 5-year plan that Green Finance to Expand to Support China's Low-Carbon Goals: https://www.fitchratings.com/research/corporate-finance/green-finance-to-expand-to-support-china-low-carbon-goals-03-11-2020 “The green finance market in China will expand, driven by supportive policies and government initiatives, as it is an important tool for policymakers to achieve the country's pledge of net zero carbon emissions by 2060.”
SCMP reports that Trump bans US investments in what he calls Chinese ‘military-controlled’ companies, sending Hong Kong, China markets lower: https://www.scmp.com/business/markets/article/3109662/hong-kong-china-markets-tumble-after-trump-bans-us-investments “The executive order, Trump’s first policy action since the November 3 presidential election, would ban investments in 31 companies including China Mobile and China Telecom, from a list of 20 names compiled in June and a list of 11 Chinese entities highlighted in August. The order takes effect from January 11 next year, nine days before the inauguration of president-elect Joe Biden, and US investors holding the stocks will be given a grace period until November 11, 2021 to sell them.”
AsianInvestor reports that China’s combined QFII, RQFII could boost futures usage: https://www.asianinvestor.net/article/chinas-combined-qfii-rqfii-could-boost-futures-usage/463954 “China’s move to ease capital market access for foreign investors by combining two of its major inbound investment programmes will broaden asset class choices, with investors showing particular enthusiasm for increased futures trading, say investment industry advisers.”
S&P reports that China’s recovery could bring more defaults to light: https://www.spglobal.com/ratings/en/research/articles/201117-china-recovery-could-bring-more-defaults-11742601 “We don't anticipate this run of SOE distress will cause systemic risk, given the default rate in China is still well below 1% of outstanding bonds. However, the government will likely take steps to address investor concerns on information disclosure or poor governance--such as failure to pay even with cash at hand, or moving assets around to limit recovery.”

India

IiAS argues that Investors’ signal that regulators must enforce board composition norms for PSEs: https://www.iiasadvisory.com/single-post/investors-signal-that-regulators-must-enforce-board-composition-norms-for-pses “Having endured the failure of PSEs to meet board composition regulations over several years, in the 2020 AGM season, several institutional investors voted against board (re)appointments. But, because the Government owns majority equity in PSEs, and regulations that allow the Government extraordinary control powers over listed PSEs, investors’ ability to effect change is limited. In this context, regulators need to step in and enforce compliance for board composition norms at PSE. Better governance leads to better valuations which will help achieve our disinvestment goals.”
Environmental Finance reports that Amundi threatens to divest State Bank of India's green bonds over coal project: https://www.environmental-finance.com/content/news/amundi-threatens-to-divest-state-bank-of-indias-green-bonds-over-coal-project.html “Amundi has vowed to divest bonds from the State Bank of India (SBI) if the bank presses ahead with a loan to the giant Charmichael coal project in Australia.”

Australia

The Australian reports that ASX 100 leads way in climate-risk reporting and disclosure: https://www.theaustralian.com.au/business/markets/asx-100-leads-way-in-climaterisk-reporting-and-disclosure/news-story/ “Australia’s top 100 companies are leading the way in climate-risk reporting and disclosure, with the ASX 100 outperforming the world’s largest 250 businesses on multiple criteria despite trailing behind them just three years ago.”
The Australian Financial Review reports that APRA waters down banker bonus overhaul: https://www.afr.com/companies/financial-services/apra-waters-down-banker-bonus-overhaul-20201112-p56dxe “The Australian Prudential Regulation Authority on Thursday said it would be ditching its plan to set limits on the use of financial metrics in determining banker pay, after it proposed a cap of 50 per cent.”
The Australian Financial Review reports that Pipeline of female directors is 'weak': https://www.afr.com/work-and-careers/leaders/pipeline-of-female-directors-is-weak-20201117-p56fd1 “A fall in the number of women being appointed to senior operational roles threatens to put the brakes on female director appointments, says one of the country's most senior directors.”

Contact

Daniele Vitale
Georgeson
Head of Governance UK & Europe > Corporate Advisory
daniele.vitale@georgeson.com
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