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News digest 27/5/16: Exxon shareholder resolution over climate change

27 May 2016 by Henry Ker

Exxon shareholder resolution over climate change - read more

The latest governance stories in the news

Exxon accepts shareholder resolution over climate change

ExxonMobil will be forced to accept a new resolution to allow shareholders to nominate a candidate to the company’s board. The proxy access resolution was backed by 60% of shareholders at the company’s annual general meeting (AGM).

It is the first time in a decade Exxon has accepted any shareholder decision. There was disappointment for climate campaigners as the majority of climate-related proposals were rejected at the Exxon AGM by shareholders.

The resolution was made with climate change issues in mind, as minority shareholders seek to address these issues with the company. It follows the recent public criticism by Calpers, the largest US state pension fund, which sought to raise concerns with ExxonMobil over the group’s climate change policy. It found the lack of access to the board for large investors ‘frustrating’ – a situation which it has labelled as ‘extraordinary’.

Calpers argued that shareholders need more influence over a company’s board, in order to ensure they take climate change and the risks it poses to business seriously. They seem to have achieved this with the resolution.

Calpers, which manages about $290 billion in retirement funds of Californian state employees, has a 0.3% stake in Exxon, worth about $1.1 billion.

 

London companies lost £16 billion in 2015 due to controllable risks

Around £16 billion was lost by businesses in London last year from risks within their control, according to research by KPMG Enterprise.

The research, which surveyed 222 chiefs of mid-sized businesses, found they are particularly affected by an over-reliance on a small number of suppliers and customers.

41% of company leaders are worried about their small base of suppliers, which left them vulnerable to ‘costly fractures in their supply chain and a loss of vital revenues’, as well as risk to price increase, fluctuation in commodity price and quality control issues. 29% were concerned about being reliant on their top five customers, despite the threat of losing a key account being half the respondents most pressing worry.

The report surveyed companies with a turnover between £10 million and £500 million – asking them how they deal with risks connected to supply chain, data security, workforce, customer base and tax.

 

Petition for BlackRock to change its approach to exec pay

A petition for BlackRock to change its approach towards executive remuneration has been signed by 75,000 people. It reflects concerns that the company, the world’s largest asset manager, does not take a hard-line stance on excessive pay at the companies in which it invests.

BlackRock, which oversees $4.6 trillion of assets, voted in favour of 97% of US pay reports in the year ending June 2015 − although globally it voted against 16%.

The signatories include more than 4,000 BlackRock clients and thousands of company shareholders, according to the campaign group that launched it, SumOfUs.

The petition states: ‘BlackRock thinks it can keep voting to support fat cat CEOs without any backlash, because it doesn't think anyone is paying attention. If we can show that thousands of its investors and customers are watching, we can force BlackRock to change its stance on CEO pay.’

 

NHS hospitals reveal record deficit

Hospitals in England have run up a deficit of £2.45 billion for the 2015−16 financial year – the biggest in its history. The deficit is almost three times the size of the figures from 2014−15 (£822 million) and 21 times that of 2013−14 (£115 million).

The official figures, released by NHS Improvement, show that NHS trusts in England ended the year £461m worse off than forecast. The government previously told the NHS that the deficit should not be more than £1.8 billion, leaving the NHS having to find £700 million to make up the difference.

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