Unclear regulations hinder integration of ESG factors into investments
Unclear public regulation is a barrier for responsible investment, according to OECD in a new report. Read more in an article in Økonomisk Ugebrev.
Decline in shareholder democracy
While the Danish and European authorities are pushing institutional investors to be more active and responsible owners of companies they are investing in by voting at the general meetings, among others. It is quite the opposite in the United States. Read more in the Økonomisk Ugebrev article.
Active and responsible ownership through proxy voting
While Danish institutional investors are preparing for new recommendations to become more active owners, active ownership in the US has entered a new phase. Here institutional investors are pushing each other to be more active and responsible owners through proxy voting. Read more in a new Økonomisk Ugebrev article.
EU encourages active and responsible ownership
Just before Easter, the European Union finally adopted the Shareholders’ Rights Directive that is encouraging institutional investors to behave more as active and responsible owners. After ten years of dispute, the European Council followed the EU Commission and Parliament and gave its green light for the comprehensive directive that applies to more than 8.000 listed companies. The member states have now up to two years to transpose the new provision into domestic law.
Read MoreOverpaid CEOs underperform financially
Extremely high payments to CEOs are often explained by the “fact” that they get “peanuts” compared to the much higher financial value they are creating for shareholders. In Denmark, it has recently been the answer to the many critics of the IPO of Nets, which resulted in a gain of nearly USD 100 million for the CEO. And the answer was similar when it was known that America’s new foreign minister, Rex Tillerson, raised an annual compensation of USD 27 million as CEO of Exxon Mobil and an even greater amount when he said goodbye to the oil company. However, two independent studies based on the US data prove that the truth is rather the opposite.
Read MoreClimate Engagement leads to better Management
During the last months of 2016, Engagement International engaged on behalf of institutional investors with 28 of the 100 listed global companies that are contributing the most to climate change – now or potentially later, due to their fossil fuel reserves. About 40% of the companies have a clear commitment to the Paris Agreement and are explicit about their own responsibility to contribute to the two-degree-goal. However, in general, the highly exposed energy-, mining-, steel- and cement companies need to do much more. Two thirds have shown an increasing carbon emission intensity over the last five years. And a new set of very ambitious financial disclosure recommendations from the Financial Stability Board (FSB) will push not only these highly climate change exposed companies, but organisations in all industries to adopt a better management of their climate risks and opportunities.
Read MoreStrong growth in seven archetypes of responsible investments
The amount of responsible investments in Europe and the US has grown significantly the past two years and strategies are getting still more sophisticated. It began more than 250 years ago with religiously inspired exclusions of companies that could be associated with alcohol, tobacco, weapons etc. This first generation approach is still the most dominating strategy according to new surveys from Eurosif, US SIF and PRI. However, in Europe engagement and voting have grown more than 30% the last two years.
Read MorePoland: Securing national interests on its way to lower carbon future
Climate change mitigation efforts gained its momentum in October, when European Union jointly ratified the Paris Agreement to limit global warming. At the same time the debate in Poland is ongoing over the need of a comprehensive energy strategy until 2050. Although the EU countries share common interests, they face different challenges.
Read MoreNew Stewardship Code for Danish institutional investors
From 2017, Danish institutional investors are supposed to follow a new stewardship code holding seven recommendations on active ownership. The code, drafted by the Committee for Good Corporate Governance at the initiative of the Minister of Business and Growth, has been through a public hearing in September. After adjustments, the final version is planned to be published in December this year.
Read MoreDenmark’s fall from the anti-corruption throne
There are many indications that Denmark now must relinquish its position as the country with the least corrupt public sector, according to Transparency International. Danish Police has arrested nearly 50 current and former public servants and accused them for being bribed with smartphones, computers and other electronic equipment from the IT vendor Atea. The case is the largest of its kind in Denmark and embarrassing, especially because the persons arrested work for the National Police, the Armed Forces, the Military Intelligence Services, the Public Prosecutor’s Office, the Ministry of Foreign Affairs and the City of Copenhagen.
Read More12