Bombardier Chairman’s Reduced Role Fails to Placate Key Investor
Bombardier Inc. Chairman Pierre Beaudoin – member of Bombardier’s founding family- will take a “significant” pay cut as he relinquishes an executive role but remains the board’s leader, failing to satisfy a major investor agitating for change because of the planemaker’s executive-compensation practices. Beaudoin’s new position fell short of remedies sought by Bombardier’s largest outside shareholder. Caisse de Depot et Placement du Quebec had pushed for an independent chairman after Bombardier raised executive pay while cutting thousands of jobs and relying on taxpayer support for its $6 billion C Series jetliner program. Caisse spokesman Maxime Chagnon said by email “we continue to believe Bombardier needs an independent chair.” Despite the outside opposition to Beaudoin, shareholders approved his re-election with 92.3 percent of the votes cast at the annual meeting on Thursday 11th May. (Bloomberg)
New guidance urges FTSE companies to demonstrate how they act Long-Term to get better returns for savers and investors
The Investment Association (IA) published new long-term reporting guidance on 9th May aimed at driving change in FTSE listed companies, in the hope it will help to boost investor confidence and address falling UK productivity levels. The publication follows the IA’s call in October 2016 to abolish quarterly reporting in favour of meaningful long-term reporting. It sets out a detailed set of recommendations to help listed companies report more transparently and effectively on the long-term drivers of productivity, capital allocation, human capital, and company culture. Andrew Ninian, Director of Stewardship and Corporate Governance at the Investment Association, said: “All businesses need access to long-term funding to grow, but many who take a long-term view are not currently maximising their appeal to investors.” (Investment Association)
Responsible Investment
UK financial markets exposed to embedded fossil fuel reserves
Financial market indices provider S&P Dow Jones (S&P DJI) has captured data from the S&P Global 1200, which covers around 70% of the global equity market capitalisation. The research found that the UK index ranks second-highest for emissions from owned reserves, which could be burned depending on political and market factors. S&P DJI’s Carbon Scorecard analyses the carbon efficiency and energy mix alignment with the 2C target of the Paris Agreement for major S&P DJI equity benchmarks globally. While the UK index is performing well on energy transition and power generation share metrics, the markets are still exposed to both reserved emissions – which could translate to stranded assets for investors – and coal revenue – which marks the percentage of companies in the index that derive more than 10% of their revenues from fossil fuels. The Carbon Scorecard is meant to act as a barometer for the carbon efficiency of the markets, and an indication of the direction of the economy. Markets listed in the report have been urged to “build climate resilient portfolios” using the analysis of the scorecard to address issues. (Edie)
Renewables
Indian solar power prices hit record low, undercutting fossil fuels
Wholesale solar power prices have reached another record low in India. The tumbling price of solar energy also increases the likelihood that India will meet – and by its own predictions, exceed – the renewable energy targets it set at the Paris climate accords in December 2015. Analysts called the 40% price drop “world historic” and said it was driven by cheaper finance and growing investor confidence in India’s pledge to dramatically increase its renewable energy capacity. By 2022, India aims to have the capacity to generate 175 gigawatts of power from solar, biomass and wind energy. Kanika Chawla, a senior programme lead at the Delhi-based Council for Energy, said the successive drops in renewable prices “should be celebrated” but cautioned that systemic reforms were still needed to make the trend sustainable. (Guardian)
Corporate Reputation
UK advertisers split over ending YouTube boycott after brand safety scandal
UK advertisers including Marks & Spencer, Tesco and Pepsi are still withholding ad spend from YouTube despite moves by its parent company Google to allay marketers’ concerns over brand safety, such as restricting where ads appear and hiring people to help monitor the site. This comes after an investigation by The Times found ads from big brands were appearing next to unsavoury or illegal content posted by groups including terrorists, white supremacists and pornographers. The majority of brands that have spoken to Marketing Week have said that while they are “encouraged” by Google’s attempts to make the way it serves ads on YouTube more transparent and to provide better guarantees, they still need more before they resume advertising. Toyota has also said it is not advertising on YouTube while Nestle says nothing has changed in its approach. (Marketing Week)
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