Amazon Pressed on Workers’ Rights – Again

Long-term shareholder value under threat, investors warn, as tech giant still fails to live up to human rights commitments. Issues around workers’ rights to freedom of association and collective bargaining are due to come under the spotlight once more during Amazon’s 2024 AGM next week. Building on similar initiatives in…

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Investors Seek Clarity on Banks’ Green Finance

HSBC AGM sparks controversy as ShareAction flags continued lack of targets and transparency over sector’s sustainability claims.

NGO ShareAction has declared it will continue to aid investors in their push for transparency into HSBC’s green finance investment pledge, highlighting endemic issues across the banking sector.

The decision followed the HSBC’s most recent AGM, at which a coalition of shareholders requested the bank explicitly set out how it intends to use the money it has earmarked for sustainable finance and establish a renewable energy funding target. HSBC has previously said it would target between US$750 billion and US$1 trillion by 2030.

The 16-strong investor group that asked the question during HSBC’s AGM represents US$892 billion in assets, including the likes Ethos Foundation, Epworth Investment Management, Royal London Asset Management, and Sweden’s Folksam pension fund. Following the meeting, HSBC agreed to meet with ShareAction and investors to discuss its green finance strategy before the 2025 AGM.

Jeanne Martin, Head of Banking Programme at ShareAction, told ESG Investor that the news was “broadly very positive” as it showed the bank’s willingness to consider investor expectations and demands on green finance.

“What we’d like to achieve is a bit more of a conversation, and really clarify what we’re after by providing context to our requests,” she added. “We also want the bank to hear from shareholders directly. It’s one thing to hear from ShareAction, but it’s another to really get confirmation that they care about this issue and want to see the bank move on green finance.”

By the end of the 2024 AGM season, ShareAction will have asked a total 24 questions at the AGMs of 17 European banks this year, including eight specifically focused on green finance. The advocacy has indicated its intention to attend the upcoming AGMs of BNP Paribas (14 May), Crédit Agricole and Société Générale (22 May).

Industry-wide issue

Last November, research from ShareAction found that Europe’s top 20 banks – including HSBC – successfully promoted their green finance credentials, but lacked transparency on green finance activity, leaving them and their investors exposed to greenwashing allegations.

“As investors, we are looking for as much transparency as possible from our portfolio companies, [and] clearly defined targets help us understand and evaluate their climate

Pension Funds Slow on DEI

Asset owners are urged to better reflect their priorities when engaging with third-party providers and underlying investments. 

Diversity, equity and inclusion (DEI) themes have been increasingly featured in pension funds’ investment policies and assessment criteria for third-party providers, but research has highlighted their surprising absence in ongoing engagement efforts.  

Published by pension fund advisor Pensions for Purpose, the report drew on interviews with 21 organisations – including pension funds, trustees, asset managers and investment consultants – across the UK, Europe and the US, outlining how they consider DEI across their organisation and underlying investments, as well as their approach when interacting with third-party providers. 

All surveyed asset owners agreed that DEI correlates directly with business performance and have integrated such themes into their business models to varying degrees. Forty-two percent of asset owners have also implemented DEI voting and engagement polices, expecting diverse board representation. 

However, the level of development of pension funds’ DEI action plans and strategies still “varies significantly”, Pensions for Purpose said. For example, almost a third have not set specific targets, and only two were intentionally considering DEI topics in their underlying investments. There also remains a “marked lack” of engagement on DEI in pension funds’ underlying portfolio companies, the report noted. 

“There are pension funds doing great things on DEI, and they think about it holistically,” Karen Shackleton, Chair and Founder of Pensions for Purpose, told ESG Investor. “But those pension funds remain in the minority.” 

Ninety-two percent of surveyed pension funds said they had incorporated DEI factors into asset manager selection and oversight processes, with one asset owner commended for setting explicit representation targets for prospective asset managers and mandating a minimum participation of 50% of women or individuals from underrepresented backgrounds on the investment committees of their outsourced CIO.  

“However, most of these asset owners aren’t then challenging their managers [or investment consultants] to improve their DEI performance,” said Shackleton. “It’s fairly straightforward for an asset owner to bring DEI into their selection process, but beyond this DEI appears to be a consideration, not a deal breaker.” 

Until asset owners start regularly encouraging third-party providers to improve their DEI performance beyond the selection process, they won’t improve, Shackleton argued.  

Church Commissioners’ Planet Lead to Heighten Engagement Efforts

In her new role, Laura Moss-Bromage will develop a coherent strategy focusing on climate change, nature loss and social inequality.

The Church Commissioners for England has appointed Laura Moss-Bromage as Planet Lead – a new role created as the organisation looks to bolster engagement with companies and policymakers on climate change and biodiversity.

“My responsibilities will be designing and implementing the fund’s nature strategy as well as driving our environmental engagement initiatives,” Moss-Bromage told ESG Investor. “As I build out the fund’s nature strategy, a core pillar will be understanding the climate and nature impacts of the portfolio, which will then shape our future environmental stewardship priorities.”

The Church Commissioners is already involved in a number of environmental engagement initiatives, including Climate Action 100+, Nature Action 100, Finance Sector Deforestation Action, Investor Policy Dialogue on Deforestation, and the Investor Initiative on Responsible Nickel Supply Chains – facilitated by the Investors for Sustainable Development (VBDO) and Rainforest Foundation Norway.

As part of her new role, Moss-Bromage will design and drive the Church Commissioners’ portfolio-wide biodiversity strategy and lead on nature and climate-related stewardship initiatives.

“The Church Commissioners views engagement as one of the most important levers to drive real-world change,” she said. “I will be revamping our climate change engagement strategy to focus engagement efforts on companies that we believe will genuinely play an important role in the transition.”

Corporate activity has been a major driver of both climate change and nature loss, so engaging with companies to reduce their impact and influence positive change has been a priority, Moss-Bromage explained.

Engaging with industry bodies and policymakers can also be an effective lever, as it helps to provide companies with a policy environment that is “stable and supportive from a sustainability perspective,” she added.

Last June, the Church of England Pensions Board (CoEPB) and Church Commissioners announced they were divesting from oil and gas firms – including BP, ExxonMobil, Shell and Total – due to their failure to align with climate goals. The latter had previously excluded 20 oil and gas majors from its investment portfolio.

“Over the past few years, we’ve seen significant commitments made by organisations and now it is time to focus on the actions that will really lead to transformative outcomes,” said Moss-Bromage. “That will be