Engaging with the “Big 5” to push for an energy finance transition
Throughout the second quarter of 2024, SHARE has met with each of the “Big 5” Canadian banks (Bank of Montreal, Bank of Nova Scotia, Royal Bank of Canada, Canadian Imperial Bank of Commerce and Toronto Dominion Bank).
These engagements have focused on supporting the banks to explore energy finance ratios as presented by Bloomberg NEF, including setting a target of equalizing their financing of renewable and non-renewable energy sources in 2024.
Given the recent passage of federal Bill C-59 and the anti-greenwashing provisions contained within, it is crucial for investors to have confidence that their portfolios are insulated from any legal risks that could develop as a result of this new policy development. These energy finance ratios hold the promise of giving investors a clear, concise and comparable insight into each bank’s financing of the energy transition necessary to address climate change.
SHARE’s engagements on this issue have met with some success; following investor engagement, including a proposal by NYC Retirement Systems, RBC has agreed to measure and report on these ratios.
“We think it’s an important metric going forward,” said RBC CEO Dave McKay, committing to releasing the ratio in the bank’s 2024 climate report. With the RBC takeover of HSBC now complete, the bank is now the largest in Canada by more than $50 billion, meaning RBC is well-positioned to set expectations for the reporting of these ratios Canada-wide.
Just one day after the announcement by RBC, SHARE staff met with TD’s investor relations, risk management and sustainability teams, and secured a commitment from the bank to explore energy financing ratios in 2024. We will track this commitment, as well as progress across all Canadian banks, in the lead-up to the banks’ filing deadline this fall.
Calling for the mitigation of human rights risks at Nike
Following the March filing of a shareholder proposal at Nike, the exempt solicitation prepared by SHARE and co-filers is now available. The proposal, which will be voted on at Nike’s AGM in September, requests that the Company publish a report evaluating how implementing worker-driven social responsibility (WSR) principles and supporting binding agreements would impact its ability to identify and remediate human rights issues in sourcing from high-risk countries.
There is increasing concern among investors that Nike’s current approach to mitigating human rights risks within its supply chain is insufficient, leaving it exposed to legal and reputational risk. The proposal recognizes that Nike sources from high-risk countries where labour laws are inadequately enforced or subject to corruption, exposing the company to operational disruptions, legal liability, and reputational harm.
Nike must enhance its due diligence in these contexts, and the adoption of WSR principles would better position Nike to mitigate these risks, take the lead in corporate accountability and effective supply chain management, and deliver meaningful human rights outcomes.
Upholding fundamental labour rights at Naspers
On August 22, SHARE attended the AGM of Naspers, a South African multinational that wns Brazilian delivery app giant iFood and has a significant stake in Delivery Hero. Shareholders were asked to confirm the appointment of iFood CEO Fabricio Bloisi as CEO of Naspers.
Under Mr. Bloisi’s watch, an investigation revealed that iFood had hired a third-party firm to create social media accounts and infiltrate couriers’ efforts to organize for decent work. iFood was asked to sign a conduct adjustment agreement with the Brazilian government. The company faced several work stoppages organized by couriers and was criticized by workers and the Brazilian government for failing to participate in good faith in tripartite negotiations for a bill to protect the rights of their digital platform workers.
At the Naspers AGM, SHARE highlighted the reputational, operational, and regulatory risks that investors face when the companies they are exposed to mismanage labour issues. SHARE staff asked the board what measures and oversight it would take to ensure fundamental labor rights are upheld across Naspers’ global platform company portfolio. We look forward to supporting efforts to ensure that platform companies, like Naspers, uphold fundamental labour rights wherever they operate around the globe.
