Key Governance Developments - May 2022

Key Governance Developments


Schroders to back shareholder climate resolutions at Chevron, ExxonMobil and Shell

Asset manager Schroders will vote in favour of shareholder resolutions at Chevron, ExxonMobil and Shell calling on the companies to implement a faster transition to net zero emissions consistent with the Paris Agreement. It has already backed similar proposals at oil companies including BP, ConocoPhillips, Occidental Petroleum and Phillips 66.

Best source: Business Green (subscription required)

BNY Mellon subsidiary to pay SEC $1.5m settlement over ESG disclosures by funds

BNY Mellon Investment Adviser has agreed to pay a penalty of $1.5m to settle Securities and Exchange Commission allegations that it misstated or omitted information in its claim published between July 2018 and September 2021 that all its funds had undergone a review for environmental, social impact and governance criteria, when this was not the case. The settlement is a first for the SEC, which has targeted greenwashing in its enforcement priorities.

Best source: Financial Times (subscription required)

See also: Securities and Exchange Commission

US imposes sanctions on Gazprombank and Sberbank executives

The US has imposed sanctions on 27 executives at Russia's Gazprombank, but has refrained from freezing its assets or outlawing transactions with the bank, which is relied upon by many European countries to process payments for gas and oil. Eight Sberbank executives have also been sanctioned, along with Moscow Industrial Bank and its 10 subsidiaries. The US has also imposed sanctions on weapons manufacturer Promtekhnologiya, three TV stations, seven shipping companies and a marine towing business, and has prohibited Americans from providing accounting, trust and corporate formation, and management consulting services to Russians, though legal services are still permitted.

Best source: Reuters (registration required)

Credit Suisse sued in US over alleged violation of Russia sanctions in securitisation deal

Credit Suisse has been served with a lawsuit in a New York court alleging that the Swiss bank misled investors about its dealings with Russian oligarchs, saying the bank had made false statements regarding a securitisation deal designed to remove loans to wealthy clients to acquire yachts and personal jets from its books. The lawsuit also cites a request by US lawmakers for documents relating to sanctioned individuals. Credit Suisse insists that it has destroyed no documents, although media reports suggested that potential investors including hedge fund firms had been urged to destroy some documents related to the transaction after it was made public.

Best source: Reuters (registration required)

See also: Pomerantz LLP

Activist group calls for financial sector to be brought under EU human rights legislation

International human rights lawyer Charlotte Michon says that Luxembourg businesses have an obligation to carry out due diligence on the countries in which they and firms in their supply chains operate to ensure that human rights are respected, in order to prepare them for the EU's planned Corporate Sustainability Due Diligence Directive, although it is not scheduled to become national law before 2027. Although financial sector firms would be exempt from the requirements of the directive in its current draft, Antoniya Argirova of activist group Initiative Devoir de Diligence says institutions should comply anyway, pointing out the international character of the sector and the existing requirement on financial businesses to comply with anti-money laundering and financing of terrorism rules. The organisation is calling for national legislation to require compliance by the financial sector and for the government to pressure EU decision-makers to amend the directive to this effect.

Best source: Wort (in French)

See also: L'essentiel (in German)

See also: L'essentiel (in French)

UK companies raise concerns about lack of progress on corporate governance legislation

More than 50 UK companies, trade unions and business groups have written to prime minister Boris Johnson and business minister Kwasi Kwarteng over the government's lack of progress in overhauling corporate governance regulation. The administration had promised changes after recent corporate collapses linked to poor governance and in many cases inadequate audit oversight, but no reform measures are included in the government’s forthcoming legislative programme.

Best source: Financial Times (subscription required)

British Airways CEO under pressure over cancellation of flights due to staff shortages

The board of International Airlines Group is considering removing British Airways CEO Sean Doyle over a string of problems at the airline, including the recent cancellation of hundreds of flights as a result of staff shortages. The group, which also owns Aer Lingus and Iberia, is expected to report a loss of £462m for the first three months of this year. BA’s reputation has also been dented by computer and client service issues.

Best source: This is Money