CORPORATE REPUTATION

Vanguard quits NZAM over investor concerns, political pressure

Asset manager Vanguard has announced it is resigning from the Net Zero Asset Managers initiative (NZAM), citing investor ‘confusion’. With $7.1 trillion under management and more than 30 million customers, Vanguard is the second-largest global money manager. Vanguard said the alliance’s commitment to fighting climate change had resulted “in confusion about the views of individual investment firms”. Vanguard has also faced significant political pressure from Republican groups, with state attorney-generals lobbying the Federal Energy Regulatory Commission not to renew Vanguard’s authorisation to buy shares in US utilities. The group cited its NZAM membership as evidence it was trying to influence corporate policy. NZAM was founded in 2020 and had 291 members managing $66 trillion in assets as of 2022.  (Financial Times)*

ENVIRONMENT

Report: businesses well positioned to restore planetary boundaries

Corporate action alone could put the world back within planetary boundaries relating to freshwater use, and forest coverage, generating billions in social and economic benefits, a report concludes. Published by consultancy McKinsey, the report sets out how corporate activity to date has contributed to the over-exploitation of natural resources and assesses potential levers for change. The report states terrestrial biodiversity loss is particularly exposed as a planetary boundary. However, the report states that most investments in resource conservation and restoration come with strong returns on investment, and action is often cheaper than the risks of inaction. The report states there is “significant potential” in tackling plastic pollution across the supply chain, procuring additional renewable energy, implementing sustainable forestry management, and reclaiming disused mines. (edie)

POLICY

EU agrees law to make airlines pay for CO₂ permits by 2026

The European Union has reached a deal on a law to increase the price that airlines have to pay when they emit carbon dioxide emissions. Airlines running flights within Europe currently have to submit permits from the EU’s carbon market to cover their carbon dioxide emissions, but the EU gives most of those permits for free. This is set to change under new legislation which would phase out free permits by 2026. Free permits would be cut by 25% in 2024 and 50% in 2025. Airlines will then be expected to pay for CO₂ permits, providing a financial incentive for them to limit pollution. A limited number of free CO₂ permits will be made available for airlines that use sustainable aviation fuels. (Reuters)

TAX

BP told to donate ‘wartime profits or pay windfall tax, MPs say

Oil and gas company BP should donate its “wartime profits” in Russia to the reconstruction of Ukraine, or the UK government should impose a windfall tax on the company, MPs have told parliament. The British oil supermajor has a 19.75% stake in Rosneft, one of the Kremlin’s most important oil assets and signalled its intent to exit Russia following the Ukraine invasion. The company took a £18.7 billion hit by writing off the shareholding, but still owns the stock in the firm. In a parliamentary debate, MPs from all parties put pressure on the government to ensure BP completely left Russia. Analysis from Global Witness shows that a dividend Rosneft has offered BP is worth an estimated £580 million. BP has not issued an update on efforts to sell the stake. (The Guardian)

GOVERNANCE

BlackRock chief Larry Fink pressured to resign over ESG ‘hypocrisy’

A UK activist investor has called on asset manager BlackRock founder Larry Fink to resign as chief executive over “apparent hypocrisy” of the company’s use of ESG factors. Bluebell Capital Partners went public with its concerns that BlackRock had changed positions several times on investing in thermal coal production while failing to live up to Fink’s widely publicised sustainability commitments. Bluebell added that BlackRock had failed to support its position on environmental shareholder resolutions at mining group Glencore and chemicals group Solvay. BlackRock said it believed Bluebell’s campaigns were not in the best economic interests of its clients. Bluebell is best known for helping to topple the chief executive at FMCG Danone in 2021. (Financial Times)*

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