CalPERS, which cast “against” votes at 43 percent of its portfolio companies in its Say-on-Pay voting during the 2018 proxy season and against 53 percent in 2019, is continuing to adjust its methodology for evaluating pay plans. CalPERS Adopts New Say-on-Pay Methodology – JOHN ELLERMAN compensation consultants. That same year, CalPERS announced a significant change…
Lloyds set to halve carbon emissions it finances in 10 years | Business | The Guardian
Environmental campaigners have welcomed a pledge by Lloyds Banking Group to halve the amount of carbon emissions it finances through personal and business loans by 2030. The commitment comes as lenders face heightened criticism over their role in fuelling the climate crisis by funding projects and companies that rely heavily on fossil fuels. Lloyds did…
The Power of Voting: Active Ownership for Index Strategies
Index firm Solactive writes: September 2019 marked a major milestone in US financial history as the assets managed under passive strategies (the selection of stocks based on a mechanical, rules-based approach) surpassed those under active strategies. The rise of ESG and its latest evolution, active ownership, is another megatrend within the investment world. Are these…
Can Wall Street save us from climate change? (Fat chance.) – The Washington Post
Robert Samuelson is very skeptical about Larry Fink’s interest in or ability to do something to address climate change. To be sure, none of this precludes the possibility that companies may make significant advances involving climate change — whether to reduce greenhouse gas emissions or to improve energy efficiency. But there are two overriding realities…
Federal Workers Profit From Tobacco and Oil, Even If They Don’t Want To – The New York Times
When the Federal Thrift Savings Plan (a sort of 401(k) for federal employees) replaced the defined benefit plan, a big concern was the potential conflicts of federal workers making regulatory and enforcement decisions that might affect portfolio companies. And so the solution was an index fund, where they would own the market as a whole…
Why Fossil Fuel Companies Are Reckoning With Climate Change | Time
As concerns grow over the existential challenges posed by climate change, Shell must grapple with its own existential crisis: How should a company that generates most of its profits by serving the world’s enormous appetite for oil navigate a long-term future in which shifting political and economic tides threaten to make fossil fuels obsolete? The…
The Hidden Dangers of the Great Index Fund Takeover – Bloomberg
We have repeatedly warned about the problem of index funds, including VEA Chair Robert A.G. Monks’ book Citizens Disunited, with extensive data on “drone” companies (with stock ownership tracking the index) and VEA Vice Chair Nell Minow was one of the judges who selected Index Funds and the Future of Corporate Governance: Theory, Evidence and…
A Sense of Climate Urgency Takes Hold in Davos – Bloomberg
Davos is cloaked in white, but its agenda is green. Environmentalism—fighting climate change in particular—has emerged as one of the biggest priorities of the World Economic Forum annual meeting…The biggest obstacle to fixing the planet’s climate is free-riding—shirking efforts to fight climate change while benefiting from the efforts others make. The repeated interaction with fellow…
In Stakeholder Capitalism, Shareholders Are Still King – WSJ
[B]ig business in the U.S. is talking up stakeholder capitalism as it fends off growing criticism of its place in society. Most prominently, in August, the Business Roundtable released a statement signed by 181 CEOs in which they pledged “a fundamental commitment” to “deliver value to all” stakeholders. For some people, this renewed interest in…
Measuring What Matters
There is a groundswell of interest in metrics that go beyond our traditional financial view of companies. Many organizations have done extensive work on frameworks for ESG metrics, non-financial metrics, or integrated reporting, each targeted at a range of stakeholders including customers, employees, policymakers and investors. The challenge we often hear is that companies work…
