Business executives and boards face dilemma as US administration turns against sustainability

Businesses in the US – and some in Europe – are facing a dilemma if they have embraced the reduction of greenhouse gas emissions and/or diversity, equity and inclusion within their corporate ethos and goals. The new administration in Washington's repudiation of efforts to curb climate change and its insistence that DEI initiatives are inherently discriminatory, not to mention legal action by state authorities, have prompted many businesses and organisations such as universities to dial back their commitment to ESG goals. Some are looking to fly below the radar, such as UK bank Barclays, which has told employees in the US not to mention its membership of the Net-Zero Banking Alliance unprompted; JPMorgan Chase has renamed its DEI programmes as diversity, opportunity and inclusion. The six largest US banks have all quit the net zero group since the re-election of Donald Trump in November, although most of them say they will continue to pursue decarbonisation goals independently. Boards may decide that the administration's anti-ESG measures require companies to adopt greater discretion to avoid retaliatory action that could severely damage their business.

Peruvian farmer’s case against German energy group seeks contribution to cost of flood protection measures

A court case brought by a Peruvian farmer against German energy group RWE could lead to further litigation against high-emission businesses and potentially require companies to pay compensation for the impact of global warming. With support from activist group Germanwatch, Saul Luciano Lliuya is seeking around €21,000 from RWE as a contribution towards a $3.5m flood defence project in Peru's Andes mountains. Based on a historical production database of large fossil fuel and cement producers collated by provider Carbon Majors, Lliuya argues that RWE is responsible for almost 0.5% of all man-made emissions worldwide since the industrial revolution and that it should therefore pay a proportional share of remedial measures. The case was first heard and dismissed by a court in Essen in 2015. However, a higher regional court in Hamm two years later found legally conclusive his argument that RWE may be held liable if its actions are found to infringe on someone's property rights, and commissioned experts to compile evidence on whether emissions from RWE power plants can be shown to increase global warming and contribute to the melting of the glacier, and whether that puts Lliuya's home at risk of flooding.

Best source: Reuters (subscription required)

Activist investor Follow This urges vote against BP chairman over reversal of climate strategy

Activist investor Follow This is calling on other shareholders to vote against the re-election of BP's chairman Helge Lund at the company's annual general meeting on April 17. It argues that shareholders should have been given a vote on BP's revised strategy announced by CEO Murray Auchincloss last month, abandoning its previous plan to reduce oil and gas production by 40% by 2030. Follow This insists it does not want Lund to resign but to admit that the company should permit a shareholder vote on the strategic reversal.

Best source: Upstream Online

Luxembourg government committed to protecting its voting rights at satellite operator SES: Luc Frieden

Prime Minister Luc Frieden says the government intends to maintain its one-third share of voting rights in satellite operator SES after the company's board rejected a proposal by US hedge fund manager Appaloosa Management to reduce the voting power of Luxembourg state entities to their equity proportion of 16.7%. He says that the state aims to retain the same proportion of seats on any new board, noting that most of the company's activities continue to be carried out from Luxembourg. However, opposition MP and former economy minister Franz Fayot has criticised the government's stance, saying Frieden should have pushed back harder against a 7% minority shareholder's demands. He argues that SES needs to continue to invest in business development and reduce its debt to prevent further pressure on its corporate governance in future.

Best source: Luxembourg Times

See also: Paperjam (in French)

See also: Paperjam (in French)

FCA fines Crispin Odey £1.8m and bans him from financial industry for frustrating company’s efforts to investigate abuse claims

The UK's Financial Conduct Authority has fined hedge fund firm founder Crispin Odey £1.8m and banned him from the financial services industry on grounds of his lack of integrity. Odey plans to challenge the decision in the Upper Tribunal, an appeal court against the regulator's decisions. Odey, who founded the now-defunct Odey Asset Management in 1991, was ejected from the firm in 2023 after 13 women reported alleged abusive sexual conduct, but the FCA penalties were not based on the sexual harassment accusations but on his alleged attempts to frustrate the company's efforts to address complaints about his behaviour and bring disciplinary proceedings against him. Odey twice fired all members of the company's executive committee after they planned disciplinary hearings about his behaviour, taking advantage of his majority shareholding in the business to replace them with himself.

Best source: Reuters (subscription required)

See also: The Guardian

BP rejects calls for shareholder vote on strategy shift from renewables to expansion of fossil fuel production

Oil and gas group BP has rejected a call by institutional shareholders for a vote on a change in its corporate strategy, which now favours expansion of oil and gas exploration over renewable energy investment. Investment and wealth management businesses including Robeco, Rathbones and Phoenix Group with more than $5trn under management have complained to BP chairman Helge Lund that increasing investment in new fossil fuel projects exposes them to increased risk of stranded assets in the future. However, BP has declined to offer a Say on Climate vote at its next annual general meeting on April 17.

Best source: Net Zero Investor

Institutional Shareholder Services reports increase in AGM resolutions in US seeking to dismantle ESG policies

Proxy advisor ISS-Corporate says the number of anti-sustainability motions being put to shareholders of US companies has risen to 14.7% of all resolutions to date this year, up from 10.2% in the same period of 2024. The Institutional Shareholder Services body says the number of resolutions advocating sustainability action peaked in 2022 and has since dropped, while motions seeking to scale back or end ESG policies and initiatives are growing. More than 60 counter-sustainability proposals have already been filed in 2025, and ISS-Corporate predicts the number will reach 150 for the full AGM season. However, the proportion of sustainability-positive proposals remains far higher than the number of resolutions opposing ESG policies.

Best source: Investment Executive

US hedge fund shareholder calls for reduction of Luxembourg government’s voting power within SES

US hedge fund manager Appaloosa Management, which owns just over 7% of SES's equity, has called on the Luxembourg government to relinquish its privileged voting rights in the capital of the satellite operator. Since the group was launched in 1985, the corporate structure of class A and B shares has given the government and two public-sector banks 33% of the voting rights even though their combined shareholding amounts to just 17% of the equity, and they also have the right to approve new shareholders. Appaloosa says that given the challenges facing the company in a fast-changing satellite communications market, the dual share class structure should be abolished, arguing that the government's legitimate interests in maintaining domicile, proportionate board representation and substantive operations in Luxembourg can be addressed through provisions added to SES's articles of association or by contractual agreement.

Best source: Luxembourg Times (subscription required)

See also: SpaceNews

See also: Tageblatt (in German)

See also: L'essentiel (in German)

BNP Paribas invites shareholders to extend age limit for CEO Jean-Laurent Bonnafé

BNP Paribas will ask shareholders to raise the age limit for CEO Jean-Laurent Bonnafé, which would pave the way for him to stay in his post until 2028 or even longer. An extension would allow Bonnafé, who has already headed the bank for more than 13 years but has no clear successor, to complete priority operations including the overhaul of the bank's French commercial and retail business. The bank's proposal also includes increasing the retirement age for chairman Jean Lemierre from 76 to 79.

Best source: L'Agefi (subscription required, in French)

See also: Bloomberg (subscription required)

Banks could face increased credit risk if EU weakens sustainability reporting rules: European Banking Federation

European banks might face significant credit risk if the European Commission decides to weaken sustainability reporting requirements, according to the European Banking Federation. Mooted changes to the Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive could result in 85% of the companies originally covered no longer being in scope and not required to report on various sustainability-related metrics. Since banks have realigned their credit assessment processes with the original data requirements, they may no longer have access to the information they need to assess corporate credit risks accurately, according to Denisa Avermaete, the federation's senior policy adviser for sustainable finance.

Best source: Bloomberg (subscription required)

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