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Corporate Governance

Miners Feel Green Pressure Too

Mining giants Alcoa Corp and Rio Tinto plan to fine-tune a technology that could turn aluminum smelters carbon-free for the first time. Another initiative under way in Sweden could see hydrogen replace coking coal in manufacturing steel. Like many other companies experiencing this, the key driver is to turn green stems from a primary stakeholder group—customers. It comes as no surprise, as the next generation Millennials want to ensure that their products are cleaner and greener than before. More and more companies are producing stand-alone sustainability and corporate citizenship reports to show their constituents exactly the harmonization of business strategy and sustainability, while also setting intermittent shorter term and longer-term goals across the Environmental and Social spectrums to reduce greenhouse gas emissions, injury rates, and boost diversity and inclusion. Sarah Chandler, Apple’s senior director of operations and environmental initiatives, said, “We wholeheartedly reject the notion that you can’t protect the environment while protecting your bottom line.”

UK fund platforms plan digital voting for individual shareholders

Hargreaves Lansdown, which controls 40%of the UK personal investment market, has said that it is speaking with Broadridge about creating an electronic system to make the voting process far easier. Competing UK fund Charles Stanley is also in the race of exploring the possibility to roll out a digital voting system so that individual shareholders can cast their own votes and forgo the strenuous process in formally exercising their voting rights when under the supervision of their asset manager.

Shareholders for Change

New industry body Shareholders for Change (SfC), has announced plans to put one large company on notice for aggressive tax evasion methods in the coming months. This group, which consists of smaller institutional investors from Italy, Austria, Spain, Germany and France, aims to engage on a number of important ESG issues. While the group of investors only manage roughly $22bn in assets, they hope their initiatives will promote change in governance practices, while also giving a voice to the smaller investors of the world.

“We want to cover ESG topics that are not as much in the spotlight, including human rights, workers’ rights and also aggressive tax evasion,” said Tommy Piemonte, head of sustainability research at Germany’s Bank für Kirche und Caritas, one of the founding members of SfC.

While change is the central goal, the group also realizes that size matters. Mauro Meggiolaro, among other representatives, pointed out that many of the shareholder engagement platforms have become too big and bureaucratic, leading to smaller investors losing their voices. By banding together, Shareholders for Change looks to unite smaller institutional investors and highlight issues that pose financial risks to the investment communities.

Glencore Money-Launder Subpoena

As reported in the WSJ Tuesday, the U.S. Justice Department asked for London-based diversified mining and commodities trader Glencore’s documents related to compliance with U.S. Foreign Corrupt Practices Act and U.S. money laundering statutes in Congo, Nigeria and Venezuela.

This action follows the company’s November move to oust three board members from Glencore’s Congo subsidiary amidst “material weaknesses” in the company’s financial reporting controls. Glencore recently acquired a stake of the company from a U.S. Treasury Department-sanctioned Israeli businessman, who was implicated in sanctions and who has sizable stakes in Russian aluminum and Congo mining enterprises.

Nearly 40% of Glencore’s revenue stream is realized from non-energy materials.

Big Oil Collaborates on Reducing Methane Emissions

Exxon Mobil, Chevron, Cheniere Energy, Inc., Equinor ASA and Pioneer Natural Resources Co., among others, have recently formed a methane emissions consortium focused on reducing greenhouse gas pollution and advancing technology to more adeptly fight and manage global emissions from their value chains.

The Collaboratory to Advance Methane Science (CAMS) will pursue focus on scientific research and solutions to reduce methane emissions, one of the most potent GHGs from oil and gas drilling through the refining and petrochemical processes. In partnership with the Gas Technology Institute (GTI), CAMS plans to branch out and enlist companies across the natural gas value chain and aggregate diverse expertise “to deliver factual data that can be used to inform regulations and policy development.”

Exxon Mobil has pledged to stem its methane emissions from its U.S. onshore activities and, two months ago, committed an effort to reduce methane emissions (CH4) by 15% worldwide by 2020.