Pension funds usher in new voting climate
Libor settlements, the use of Mervyn King’s eyebrow to fire a chief executive, a boss embroiled in a whistleblowing scandal: Barclays is used to finding itself cast as the City’s guinea pig.
Shareaction’s climate change resolution, to be voted on at the bank’s annual general meeting in May, is the latest example.
The pressure group says Barclays has provided $85bn in financing fossil fuel and other carbon-intensive projects since the Paris accord in 2015 — a record which means its lending “poses a serious threat to the climate”.
Today, the Pensions and Lifetime Savings Association, whose members collectively manage about £1 trillion in assets, will stoke the debate around climate-related stewardship in UK boardrooms.
In its latest voting guidelines, which I’ve seen, the body says pension trustees should be prepared to oppose the re-election of directors and chairs if companies have failed to engage properly on climate change issues.
Similarly, they should vote against directors where “the company has not listened to investor concerns about any direct or indirect corporate lobbying activity whose objectives are considered to frustrate climate change mitigation”.
Lastly, the Pensions and Lifetime Savings Association’s call for a vote against the pay policy of carbon-intensive businesses where there is no relevant metric in incentives is striking.
Its timing is spot on. And while it will emphasise that its revised guidelines are not aimed at any individual company, it will act as a further warning shot across Barclays’ bows.
The pensions minister Guy Opperman wants investors to go further: “I’d encourage them to commit to vote against the re-election of directors when firms drag their feet on climate change — not just consider it,” he said.
For Nigel Higgins, Barclays’ chairman, the gauntlet has been thrown down. How will he respond?
CBI’s tricky balancing act
These are anxious times for Britain’s biggest business lobbying group.
The Confederation of British Industry (CBI), which represents 190,000
companies employing 7m people, finds itself effectively frozen out of Downing Street.
It’s not, of course, the only organisation to have discovered itself on the receiving end of the ire of Dominic Cummings, the prime minister’s most senior adviser — but as it seeks a successor to director general Carolyn Fairbairn, the CBI needs to find a solution.
As the self-styled “voice of business”, shouting into an echo chamber rather than being granted an audience by the Prime Minister for a protracted period would equate to a failure of its membership.
To accelerate a healing process, it may need to recruit a new chief who is more attuned to a “getting Brexit done” approach than it has exhibited for most of the post-referendum period.
Fairbairn has done an impressive job in many respects, modernising the CBI and carving out a distinctive position for British business on vital issues such as climate change and boardroom diversity.
Yet after Boris Johnson’s party leadership and general election victories, the CBI’s choice of arch-remainer and Cobra Beer founder Lord Karan Bilimoria as its next president has been interpreted as inflammatory by some in Downing Street.
As I reported yesterday, Boris Johnson is about to scrap the short-lived network of business councils.
To guarantee a role on any replacement committee, the CBI must choose its next chief carefully.
Odds widen on an HSBC inside job
Ouch. A six per cent fall in HSBC shares was not the response Noel Quinn, its interim chief executive, was seeking as he outlined plans this week for 35,000 job cuts.
The reaction was predictable, though. Investors wearied by repeated HSBC strategy updates during the last decade shrugged it off as more of the same — minus the promised multi-billion-dollar share buybacks.
Simplifying HSBC by shrinking the number of business units makes sense, though.
And the revised return targets might not set investors’ pulses racing but can’t easily be dismissed as undemanding in an ultra-low interest rate environment.
For chairman Mark Tucker, the choice of a new chief is critical.
He has been castigated this week for dragging his feet, but he’s sticking to the timetable he set out when he fired John Flint last August.
Tucker’s argument that the restructuring and chief executive selection are “separate processes run in parallel” is fair enough.
Quinn looked an absolute shoo-in two months ago; but whether it’s Blackrock’s Mark McCombe, former RBS chief Stephen Hester or Unicredit bigwig Jean Pierre Mustier, my money’s still — narrowly — on an outside appointment.
Mark Kleinman is City editor at Sky News @MarkKleinmanSky