Yet Another Mining Controversy, & Governance - ESG Weekly Roundup #8
COVID-19 is an accelerant for ESG integration for asset managers and ESG operating model transformation for firms. The era of the responsible operating model is here.
Hi there,
Welcome to the cohort of new subscribers who’ve joined this week! Each Sunday I’m putting together this brief roundup of what I’ve been reading, watching and listening to. From time to time I’ll write longer pieces on weekdays. Let me know what you think of this note, particularly any ESG topics you’d be interested in reading about, by replying to this, leaving a comment, or messaging me on Twitter.
Regards,
Brennan
Reading Time: 10 minutes
Chart Of The Week
Source: How Australia’s largest super funds voted on shareholder proposals 2017-2019
The purpose of this research is not to suggest that funds should support every shareholder proposal. Rather, it seeks to highlight the clear correlation between funds with responsible investment practices and support for shareholder proposals. Funds that are engaged on ESG issues are clearly more likely to vote for improved ESG outcomes.
Quote Of The Week
And do we really – really – believe that investor action with the ambition, urgency and scale we need to tackle the climate catastrophe, racial injustice, species loss, economic inequality, the devastation of the oceans, or continuing rampant human rights abuse (to name but six) will be possible if every step has to be justified exclusively in terms of ‘financial materiality’? Or that this action can be taken by an industry that tells its people they cannot speak openly about some of the things they value most? Are organisations that operate like this healthy – for their people or society at large?
Source: Has responsible investment lost its soul?
What I’ve Been Reading
Mining giant BHP has announced it will place on hold plans to destroy dozens of sacred sites in WA as part of a major mine operation, following a national backlash over Rio Tinto's blasting of sacred sites in Western Australia's Pilbara.
“The issue here is are there leaders who can take hold of this and drive it towards positive outcomes,” said Levine of Haas Berkeley. “Identifying firms that behave appropriately and highlighting them as examples and pointing out firms that don’t can be a powerful force.”
Where’s Airborne Plastic? Everywhere, Scientists Find:
The new paper, published Thursday in the journal Science, reports finding plastic in remote parts of the United States; the researchers collected samples from 11 national parks and wilderness areas.
They found tiny bits of plastic in 98 percent of the 339 samples they collected; plastics accounted for 4 percent of the dust particles that were tested.
Australian companies fall short on ESG according to new Refinitiv report:
After a protracted drought and a subsequent catastrophic bushfire season, Australians are aware of the importance of this resource, however the report found that slightly more than a third (36%) of companies have a water efficiency policy, with only 11% holding specific targets.
Bond Trustees, and the Rising Challenge of Activist Investors:
Bondholders are the primary beneficiaries of indenture governance, just as shareholders are the primary beneficiaries of corporate governance. As beneficiaries, bondholders and shareholders have much different expectations. Indenture governance and corporate governance have evolved differently to meet those different expectations.
For example, because bondholders are only entitled to receive principal and accrued interest on their bonds, indenture governance has evolved to protect that recovery. In contrast, because shareholders, as residual claimants of the firm, are entitled to (and thus expect to receive) the firm’s surplus value, corporate governance has evolved to increase that value.
Revealed: Perth Mint and the convicted killer [$]:
The Perth Mint, owned by the West Australian government, buys up to $200 million of "conflict gold" annually from a convicted killer in Papua New Guinea, a breach of its global accreditation and internal policies.
An investigation by The Australian Financial Review can reveal the historic mint has repeatedly ignored staff concerns over purchases from small-scale gold miners in PNG, a practice heavily criticised for using child labour, degrading the environment through the use of mercury, and promoting conflict.
What I’ve Been Watching
The ESG Alphabet Soup Series
Is ESG Investing Just Marketing Spin? [definitions]
Is ESG Investing Just About Climate Change? [environmental factors]
Social Risks, Modern Slavery, And ESG Investing [social factors]
Governance, The Keystone Of ESG Investing [governance factors]
What Is The Greenhouse Gas Protocol? [environmental factors]