ExxonMobil runs into PR firestorm over lawsuit said to be aimed at silencing climate activists

ExxonMobil's lawsuit against two activist shareholders who put forward a motion calling for the oil and gas group to take more ambitious steps to reduce its greenhouse gas emissions has turned into a public relations disaster for the company. ExxonMobil launched the suit against US investment firm Arjuna Capital and Dutch shareholder group Follow This, which had called on the group to set targets for reduction of scope 3 emissions resulting from customers' use of its products. It argued that the groups had become shareholders solely to provide a basis for activism and noted that its shareholders had previously rejected a resolution calling for scope 3 emission targets. Although Arjuna Capital and Follow This withdrew the motion, ExxonMobil continued to pursue the lawsuit, saying it sought a clarification of the law governing shareholder resolutions, but critics say its true aim is to intimidate and silence climate activists. Earlier this month ExxonMobil called on proxy adviser Glass Lewis to withdraw a recommendation that shareholders vote against the re-election of lead independent director Joseph Hooley, accusing it of a conflict of interest. Now California teachers pension scheme Calstrs says it will vote against Hooley as well as ExxonMobil chairman Darren Woods; the country's biggest pension fund Calpers and other institutions say they will vote against all directors up for re-election.

Californian pension fund says it will vote against ExxonMobil directors over lawsuit pursuing activist shareholder

The California State Teachers' Retirement System is voting against the re-election of ExxonMobil chairman Darren Woods and lead independent director Joseph Hooley at the company's annual general meeting on May 29. Calstrs, other US public-sector retirement schemes and institutional investors are increasingly concerned about the oil and gas group's ongoing lawsuit against Massachusetts activist investment firm Arjuna Capital over its lodging of an AGM motion, subsequently withdrawn, calling on ExxonMobil to adopt a more demanding greenhouse gas emission reduction strategy. Other public institutions plan to go even further and vote against all board members up for re-election.

Best source: Reuters (free registration)

Equinor shareholders vote against the alignment of business strategy and investment with Paris Agreement goals

Shareholders of Norway's oil and gas group Equinor have rejected a resolution calling on the company to align its business strategy and capital expenditure with the Paris Agreement global climate and emission reduction targets. Independent shareholders led by London-headquartered investment manager Sarasin & Partners filed a resolution seeking disclosures on how any new international oil and gas developments would be aligned with the Paris Agreement goals, but the board recommended that it be rejected. The Norwegian government, which owns 67% of Equinor's equity, voted against the resolution.

Best source: Reuters (free registration)

EU member states give approval to Corporate Sustainability Due Diligence Directive

The EU Council has given formal approval to the Corporate Sustainability Due Diligence Directive, which sets out mandatory requirements for larger companies to identify and address negative impacts in their value chains on human rights and the environment. The agreement by EU member states is the final step in an often tricky legislative process that involved repeated amendments, including a substantial reduction in the number of companies affected, as well as an extended timetable for the directive's implementation. It will now apply to companies with more than 1,000 employees or annual revenues exceeding €450m, with the biggest businesses, those with more than 5,000 employees or revenue greater than €1.5bn, becoming subject to the new rules by 2027 and all by 2029.

Best source: ESG Today

Majority of non-CSRD companies aim to comply with EU sustainability reporting

More than four-fifths of companies not subject to the EU's Corporate Sustainability Reporting Directive intend to meet at least some of its disclosure requirements, according to a survey by US compliance reporting software firm Workiva, with a great majority regarding meeting the requirements as their most pressing challenge. The complexity of compliance and data collection for double materiality requirements poses significant challenges, respondents say, but 88% believe integrated reporting will positively impact long-term value creation, and 81% are confident that generative AI will facilitate reporting over the next five years. Workiva's 2024 ESG Practitioner Survey polled more than 2,000 professionals involved in corporate reporting, including finance and accounting, sustainability, risk and internal audit, in North America, Europe and Asia.

Best source: Governance Intelligence

Chief judge in Wirecard fraud trial pushes for confession from chief accountant Stephan von Erffa

Markus Födisch, the chief judge at the fraud trial in Munich of three former Wirecard executives, has urged the collapsed payment group's former chief accountant, Stephan von Erffa, to make a confession, indicating that it would lead to a reduced sentence. Von Erffa's lawyers have argued that their client bore only limited criminal liability because he appears to be on the autistic spectrum, although two psychology experts have expressed scepticism before the court. Former Dubai manager Oliver Bellenhaus has made a full confession and testified as a witness for the prosecution. A confession of wrongdoing by von Erffa would increase pressure on the third defendant, former Wirecard CEO Markus Braun, who claims he was the victim of a conspiracy.

Best source: Börsen-Zeitung (subscription required, in German)

Italy’s central bank halts shareholder pay-outs and orders governance review over loans by BFF Bank

The Banca d'Italia has ordered specialist lender BFF Bank to suspend shareholder pay-outs and review its governance structures. An investigation by the central bank has found that some of BFF's loans to state agencies should be classified as in arrears rather than being wrongly described as performing. The Milan-based bank revealed the results of the central bank's report at its first-quarter results presentation, causing its shares to plunge by one-third. BFF's secured bonds and additional tier 1 notes also dropped in value, since the freeze on pay-outs also applies to coupon payments on debt securities.

Best source: Bloomberg

Investors question readiness of HSBC to fulfil $1trn green finance commitment

Investors led by the Ethos Foundation and Royal London Asset Management are questioning the board of HSBC over the bank's promise to provide $1trn in financing for sustainable investment by 2030. The group says the plans are vague and too broad, according to UK activist group ShareAction, which is co-ordinating the campaign. The investors, which between them oversee $892bn in assets, question whether HSBC has set out a genuine path to net zero emissions.

Best source: City A.M.

See also: Edie

Equinor shareholder resolution calls for alignment with Paris Agreement

Investors including Sarasin & Partner, Storebrand Asset Management and KLP have filed a shareholder resolution at Equinor calling on the Norwegian oil and gas major to align its business strategy with the Paris Agreement. Storebrand says that Equinor's current strategy and capital expenditure plans are not aligned. The company has generated significant profits from the Russian invasion of Ukraine, which caused prices for gas in particular to spike as EU nations and energy users sought more stable suppliers. Equinor says it intends to maintain current levels of domestic output until 2035, but increase output in the UK, Brazil and US by 15% by 2030. The Norwegian government has a 67% majority holding in the firm but has yet to declare which way it would vote.

Best source: Reuters (free registration)

See also: Bloomberg (subscription required)

Panama law firm co-founder Ramón Fonseca dies before receiving money laundering trial verdict

Ramón Fonseca, a co-founder of the now-defunct law firm Mossack Fonseca, has died in hospital at 71, weeks after standing trial on money laundering charges in Panama alongside the firm's other co-founder, Jürgen Mossack. The two were awaiting a verdict, including possible sentences of up to 12 years' imprisonment, along with 27 other individuals, mostly former employees. Already suffering from ill health, Fonseca did not attend the trial, whose hearings concluded on April 19. The Mossack Fonseca partners were accused of providing false information to banks to open accounts and concealing the ownership of assets, as well as receiving and transferring funds of criminal origin from Germany and Argentina. Around 11.5 million documents dubbed the Panama Papers were leaked from the firm in 2016, making public evidence of wide-ranging tax evasion and avoidance by heads of state and politicians, known criminals and celebrities around the world.

Best source: AP

See also: BBC

See also: International Consortium of Investigative Journalists

HSBC shareholder Ping An voted against reappointment of CEO Quinn as director

China's Ping An Insurance Group voted against reappointing HSBC CEO Noel Quinn as a member of the board of directors at the bank's annual general meeting on May 3. Quinn was re-elected, supported by 83.93% of the votes, after announcing that he would step down as CEO once HSBC finds a successor. Last year, he defeated a campaign by Ping An, HSBC's largest Asian shareholder, to persuade the group to spin off its Asia business as a separate entity.

Best source: Bloomberg (subscription required)

See also: Reuters (free registration)

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