Norway’s sovereign fund manager under fire for failing to back climate resolutions at portfolio company AGMs

Asset managers and other institutional investors are increasingly coming under fire from campaign groups for failing to uphold actively their publicly proclaimed principles regarding climate change and other environmental and social issues. A Norwegian NGO has accused Norges Bank Investment Management, which manages the country's sovereign wealth fund Government Pension Fund Global, of not voting in line with its own climate goals by failing to back shareholder motions calling on companies to take action to address global warming. The central bank's asset management division, which voted against 17 of 21 climate-related resolutions last year, echoes other institutions that say many resolutions are overly prescriptive or too broad in scope. However, sustainability issues remain a key concern for a group of 27 pension funds and other institutional investors with $2.5trn in assets under management that have called on governments to take urgent action at the Cop16 biodiversity conference in Cali, Colombia, to stem nature loss. They argue that sectorial transformation plans and mandatory disclosures are required to curb declining biodiversity and degradation of nature that threaten investment returns and investor confidence.

Best source:  Reuters (free registration)

Payment group’s CEO publicly identified by UK regulator for not reporting failure to pay tax on share sale

The founder and CEO of money transfer group Wise has been fined £350,000 and placed on the UK Financial Conduct Authority's name-and-shame list for failing to inform the regulator that he had not paid tax due on a share deal. Kristo Käärmann did not pay tax on a sale of shares in the business in 2017 that resulted in a tax liability of £720,495. Tax authority HM Revenue & Customs has fined Käärmann £366,000 over his tax delinquency.

Best source: The Guardian (free registration)


EY survey finds deep concern among executives about reliability of corporate sustainability data

A survey by EY has found significant scepticism among financial sector executives regarding the reliability of environmental reporting data. The 2024 Global Corporate Reporting Survey, which polled more than 2,000 industry executives and 815 institutional investors, found that 96% of chief financial officers doubt the integrity of their organisations' non-financial data, while concern about greenwashing and the complexity of new reporting standards is prevalent. Respondents see AI as a potential tool to improve data accuracy, but adoption remains slow due to cost and compliance issues.

Best source: Sustainability Magazine

See also: EY


Pension fund and asset owner coalition demands urgent action on biodiversity loss

Pension funds and other institutional investors with $2.5trn in assets under management have called on governments to take urgent policy and regulatory action to stem biodiversity loss. A total of 27 asset and pension fund managers, including Sweden's AP funds, California's Calstrs and the Church of England Pensions Board, say governments should introduce sectorial transformation plans and mandatory corporate disclosures to help limit the impact of declining biodiversity and degradation of nature on investment returns and investor confidence.

Best source: PA Future


Bank of England to reduce further deferral period for bank employees’ bonus payments

The Bank of England is planning to reduce the deferral period for senior bankers' bonus payments from up to eight years to just five, according to the Prudential Regulation Authority's CEO Sam Woods, while for senior risk-takers the deferral period will be reduced to four years. The central bank is also considering authorisation of partial payments within the first year after bonuses being granted, rather than the current three-year waiting period.

Best source: Bloomberg

Italian government to amend corporate governance legislation changes after investor criticism

The Italian government is to amend its revisions to corporate governance legislation that were approved by parliament this year, according to economy minister Giancarlo Giorgetti. Asset managers and financial institutions had criticised changes designed to boost the attractiveness of listed Italian companies, arguing that a provision under which any slate of board candidates put forward by outgoing directors would have to be approved by at least two-thirds of all board members, which critics say would effectively give established shareholders veto powers. The proposals also included an option for companies to hold shareholder meetings in private, with only investor representatives permitted to attend. The government has defended the measures on the grounds that it wanted to curb the practice of directors getting reappointed indefinitely, without regard for shareholders' wishes.

Best source: Reuters (free registration)

Dutch corporate governance forum calls on listed companies to comply with EU sustainability reporting requirements

Corporate governance forum Eumedion has called on Dutch listed companies to align their climate action plans with at least the minimum standards laid down by the EU's Corporate Sustainability Due Diligence Directive by next year, although the legislation will not start to apply to companies until 2027, and to publish a first sustainability statement under the Corporate Sustainability Reporting Directive. The organisation says its institutional investor members will engage with listed companies on the production of high-quality sustainability statements, which would be submitted to non-binding advisory votes at their annual general meetings next year. Eumedion has also called on the country's six largest audit firms to increase their focus on the design and execution of double materiality analysis in their assurance work.

Best source: Eumedion

Germany’s government considers increased disclosures on company shareholders after UniCredit move on Commerzbank

Germany's federal finance ministry is considering stepping up disclosure rules for companies taking direct equity or derivative stakes in companies, following UniCredit's building of an equity stake of up to 21% in Commerzbank. At present, companies must disclose their interest if they build a combined stake of 5% or more, but the government is considering reducing the threshold to 3%.

Best source: Finanz-szene (subscription required)

See also: Reuters (free registration)

Activist investor Bluebell Capital Partners criticises BP over fossil fuel transition strategy

London-based hedge fund manager Bluebell Capital Partners has criticised oil and gas group BP over its energy transition plans and continuing commitment to fossil fuel extraction, calling on chairman Helge Lund to resign. The firm's co-founders say there has been a lack of clarity from BP's leadership about its long-term strategy, noting that groups such as Shell and ExxonMobil have been more candid about a pivot away from their sustainability targets back to fossil fuels to bolster their profitability. Bluebell Capital has called on BP to publish an updated strategic plan immediately, rather than waiting for the group to unveil its 2024 full-year results.

Best source: City A.M. (free registration)

UK regulators may ease bank bonus restrictions and remuneration clawback rules

The Prudential Regulation Authority and the Financial Conduct Authority are considering easing the rules restricting bank employees' bonuses and facilitating the clawback of past remuneration introduced in the wake of the 2007-09 Global Financial Crisis. Banks have been lobbying for a further relaxation of the rules, even though the UK recently announced the lifting of the cap on bonuses introduced when the country was a member of the EU. Institutions are calling for the regulators to shorten the seven-year deferral period for part of senior executives' pay and five-year deferral for senior risk-takers, along with the period during which past remuneration awards can be clawed back in the event of the bank having to restate its accounts or serious wrongdoing by the recipient of the bonus.

Best source: Bloomberg

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