Governance News 3 February 2023

40 minute read (PDF download)  01.02.2023 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue has a strong ESG focus.  We cover the wave of shareholder climate proposals already filed this year targeting US financial institutions.  We also cover the uptick in the volume of 's' proposals focused on a range of issues around reproductive healthcare and more…

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Remuneration Navigation Show below Hide below

  • US report highlights that shareholder support for 'Say on Pay' resolutions last year fell to its lowest point since 2011 

Shareholder Activism Navigation Show below Hide below

  • Major US banks are facing a wave of shareholder climate proposals focused on their 2030 targets and strategies 
  • Six large US banks are under renewed investor pressure to commit to a 'timebound phase out' of financing new fossil fuel exploration and development projects 
  • Hyundai board under pressure (again) to address concerns about the use of child labour in the company's US supply chain, SOC investment Group is pushing for independent third party monitoring of the company's US supply chain on an ongoing basis and the appointment of 'human rights expert' to the board 
  • Reproductive healthcare emerging as a growing category of shareholder 'S' proposals this year in the US 
  • JP MorganChase seeks to block duplicative conservative shareholder proposal \
  • Hindenburg has accused Adani Group of engaging in stock manipulation and accounting fraud over decades, Adani says the allegations are 'nothing but a lie' 

ESG  Navigation Show below Hide below

  • Business groups urge Australian parliament to pass the government's safeguard mechanism reforms 
  • Anti-ESG backlash: Republican Attorneys General of 25 US states challenge DOL rule 
  • In Brief | Aiming for portfolio companies to achieve net zero emissions by 2050: NBIM's new climate action plan flags that where its expectations on board oversight, management and disclosure of material climate risks are not met the fund may 'decide to vote against directors, climate transition plans and/or executive remuneration plans, and file shareholder proposals' 
  • In Brief | 'Unbearably hot summers' the new normal by 2050 without change: The Australian Conservation Foundation has launched a new mobile tool allowing people to see what the temperature is projected to be in various Australian postcodes in 2050, assuming a 'business as usual emissions trajectory'. According to the ACF, 99% of locations are projected to experience a rise in average temperature, with winter effectively disappearing in the majority of locations 
  • In Brief | New report finds 2022 was the fifth costliest year on record for insurers with global insurance losses topping $130bn, driven by natural catastrophes. According to the report, 421 notable natural disaster events were recorded in 2022 (up from the 21st century average of 396) 

Disclosure and Reporting Navigation Show below Hide below

  • Greenwashing: UK regulator to scrutinise 'green' claims made about household essentials 
  • Sustainability reporting: GRI to partner with the International Development Center of Japan to support Japanese companies to lift the quality of their sustainability reporting 
  • In Brief | PRI launches updated investment reporting framework ahead of this year's reporting season. Updates respond to feedback from signatories around the need to improve the clarity, consistency and applicability of the framework, as well as reducing the reporting effort required by signatories. The PRI has flagged plans to release guidance to further assist signatories with their 2023 reporting in coming weeks 

Regulators Navigation Show below Hide below

  • SEC strategic plan 2022-26: SEC flags plans to 'pursue new authorities from Congress where needed' in order to prepare for future 'evolutionary threats' 
  • Leadership changes: APRA announces four new executive director-level appointments including for the newly created Chief of Staff and ED Director and Technology roles 

Financial Services Navigation Show below Hide below

  • 85% of UK crypto businesses who applied failed to secure registration from the regulator, FCA has issued new guidance 
  • Financial firms and directors fined for failing to cooperate with AFCA 
  • ASIC bans director for four years over 'automated trading robot' 
  • Credit card debt (not BNPL debt) the key driver behind personal insolvencies? New study suggests the government move to implement tougher requirements on card issuers 
  • Financial advisers: Consultation period on proposed merger between industry associations the FPA and AFA now closed, EGM set to be held on 28 February 
  • In Brief | Ahead of the release of APRA's supervision and policy priorities for 2023 (expected this week), APRA Deputy Chair Margaret Cole said that the super sector can expect 'more of the same' from the regulator this year – namely, 'transformation through action' including a continued focus on strengthening the prudential framework and providing trustees with 'guidance, guard rails and supervision to drive better member outcomes' 

Risk Management Navigation Show below Hide below

  • ChatGPT and the legalities of language generation 
  • Cybersecurity: FTSE 100 retailer JD Sports has been 'the target of cyber incident' potentially impacting 10 million customers 
  • ACCC announces influencer sweep 

Other news Navigation Show below Hide below

  • Attorney General opens consultation to 'start an ongoing discussion' on the Electronic Transaction Act 1999 (Cth) 

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We provide weekly summaries of key regulatory and governance developments in Australia and overseas.