Governance News 27 September 2023

45 minute read (PDF download) 27.09.2023 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue has a strong ESG focus. Following the release of the TNFD framework last week, global investor initiative Nature Action 100 has named the 100 companies investor members will engage with in a bid to catalyse action on nature loss; separately an investment adviser has agreed to pay $19 million to settle SEC greenwashing charges; and HESTA has flagged its expectations for ASX 300 companies ahead of the AGM season. On the financial services front, ASIC has urged licensees to improve their approach to customer remediation in line with the guidance in RG 277 and more….

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UK financial regulators consult on new measures to boost diversity and inclusion and strengthen misconduct rules
Who is being appointed to Russell 3000 boards: Analysis from ISS finds new directors are more gender/ethnically diverse and younger than tenured directors
Generational change on the way for Russell 300 and S&P 500 CEOs?

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UK Asset owners and the High Pay Centre have released a proposed Fair Reward Framework for feedback
In Brief | ISS report finds seven in ten US CEOs achieved target/above target payouts in 2022, observes that: 'Despite significant variability in economic conditions over the last five years, the percentage of CEOs achieving payouts at or above target has remained relatively unchanged'

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Close to 30% of FedEx shareholders back shareholder 'just transition' proposal

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Top Story | Preparing your business for TNFD nature-related disclosure
Nature Action 100 | Global investor initiative names the 100 companies investors will engage with in a bid to catalyse action on nature loss
Greenwashing | Investment adviser to pay $19 million to settle SEC greenwashing charges
Greenwashing | Governance Institute of Australia's submission on ACCC draft guidance is generally supportive of the proposed approach (but suggests there is scope for improvement in certain areas)
True to label: SEC adopts 'names rule' to strengthen fund integrity and market confidence (including confidence in ESG labelled funds)
HESTA flags four priorities for ASX 300 companies ahead of the AGM season
Investor coalition urges banks to accelerate action on human rights including through undertaking human rights due diligence across all forms of finance
A 'pragmatic approach': UK backtracks on certain planned climate actions, Prime Minister maintains this will not impact the country's net zero commitment
Green Century claims credit for Alphabet's e-waste policy shift
GHG reporting for beginners: Initiative Climat International has released a short guide to 'facilitate more effective disclosure of GHG emissions'
In Brief | The Treasurer has warned of the significant economic impacts of Australia's warming climate and cautioned that without further action Australian crop yields could be 4% lower by 2063 (at a cost of $1.8bn in GDP in today's dollars). Noting the release of the Productivity Commission's report into the Future Drought Fund, the Treasurer flagged plans to enhance the effectiveness fund including through broadening its scope beyond building drought resilience to focusing on building climate resilience in the regions
In Brief | Global environmental disclosure platform the CDP has announced plans to align with the newly released Taskforce on Nature-related Financial Disclosure (TNFD) framework. In 2022, 20,000 companies reported environmental data through the CDP platform (and this is expected to increase in 2023). It's envisaged that this will help accelerate adoption of the TNFD framework globally
In Brief | The Australian government has announced it has permanently cancelled Commonwealth-held Kyoto 'carryover credits' which means they will not count towards Australia's legislated climate targets (and also means that no future government could use them either)
In Brief | Unlocking the 'vast economic opportunity for transitioning to a 1.5°C scenario': The UN-Convened Net-Zero Asset Owner Alliance has released a discussion paper calling for the 'removal of key political barriers [eg lack of public and private investment in infrastructure such as grid upgrades and public chargers for electric vehicles] to achieving net zero greenhouse gas emissions by 2050' and calling for support in the form of subsidies, grants and tax credits for the adoption of new technologies
In Brief | Report finds implementation of Sustainable Development Goals (SDGs) is 'far off track': The report finds that at the half-way point toward 2030 only two of 36 targets reviewed are considered on track to be achieved

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Top Story | ASIC urges licensees to strengthen remediation procedures
APRA consults on proposed enhancements to SPS515
APRA seeks feedback on potential options to improve the effectiveness of hybrid bonds
DDO enforcement | ASIC sues crypto exchange over alleged non-compliance with TMD requirement
APRA extends due dates for the submission of quarterly data reporting for insurers
Major bank fined by US regulators over failure to report accurate securities trading information
Debanking: FCA's initial data exercise finds zero evidence banks are closing accounts because of customers' political views
In Brief | ASIC has released its annual licensing report REP 772: Overall fewer applications were received and fewer finalised during the 2022–23 financial year (vs last year). The report also touches on the work undertaken in response to feedback received from the Financial Regulatory Assessment Authority (FRAA) and ASIC’s Regulatory Efficiency Unit to enhance its approach

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Tackling scams: CHOICE reiterates its support for the government to introduce mandatory codes for tech platforms
In Brief | CBA report finds that while the prevalence of scams continues to rise, anti-scam initiatives implemented by the bank over the past 12 months appear to be having an impact with customer scam losses in the January-June 2023 period down 37% on the July-December 2022 period
UK data watchdog fines nuisance callers half a million pounds