Norway’s Government Pension Fund Global (GPFG) has given a wholehearted welcome to the draft sustainability standards devised by the International Sustainability Standards Board’s (ISSB), saying the rules could be used as the core when other bodies develop broader codes.
Norges Bank Investment Management (NBIM), which manages the GPFG, published its comments as part of the consultation launched last month by the ISSB on two draft sustainability standards – one dealing with general sustainability-related disclosure requirements and a second on climate-related disclosures.
Writing to the ISSB, NBIM’s chief corporate governance officer Carine Smith Ihenacho and senior analyst Séverine Neervoort said: “We welcome the ISSB’s decision to focus on information that is relevant for investors when they assess enterprise value.”
The pair said NBIM hoped the IFRS Sustainability Standards would be recognised globally as the reference standards for reporting financially-material sustainability information.
“As other institutions develop standards for broader sustainability reporting, they could refer to the IFRS Sustainability Standards as a core, and only seek to add further topic-, region- or viewpoint-specific requirements (‘building blocks’ approach),” they said.
The “inter-operability” of the IFRS Sustainability Standards with those other standards would be important in reducing the reporting burden for companies and making sure disclosures were comparable, NBIM said, adding that it welcomed the ISSB’s efforts in that direction.
Smith Ihenaco and Neervoort said they were also pleased to see that the exposure drafts built on the logic of the Taskforce for Climate-related Financial Disclosures recommendations and incorporated the Sustainability Accounting Standards Board standards, adding that NBIM had encouraged companies to report according to the latter set of standards.
“We find that the industry-based approach of the SASB standards, and their specific metrics, meet the needs of investors and help companies approach strategically sustainability issues,” NBIM said.
Separately, NBIM has announced how it intends to vote at Friday’s upcoming Credit Suisse annual general meeting, amid mounting investor pressure on management following huge losses from the collapses of supply chain financing firm Greensill Capital and family office Archegos Capital.
NBIM said it would vote against management’s proposal to approve discharge of board and senior management for the fiscal year 2020, “excluding the supply chain finance matter”, and also said it would vote for the shareholder proposal from the Ethos Foundation and seven other Swiss pension funds for an independent special audit to investigate losses involving Greensill and other matters - a proposal management had recommended voting down.
As part of its published rationale for voting against management discharge, NBIM said: “Shareholders should have the right to seek changes to the board when it does not act in their best interest.”
On the shareholder proposal, NBIM said a company’s board should account for material sustainability risks facing it, and the broader environmental and social consequences of its operations and products.
“Where a company’s disclosure does not meet our needs as a financial investor, we will consider supporting a well-founded shareholder proposal calling for reasonable disclosure,” the SWF manager said.
Proxy advisers ISS and Glass Lewis have recommended investors vote against discharging Credit Suisse’ management but have not backed the Ethos Foundation proposal, according to the Financial Times.
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