The week in GRC: Ex-FDA chief defends joining Pfizer’s board, and BMW’s CEO stepping down
– The Guardian reported that Chubb will begin phasing out its coal investments and insurance policies within the next three years, the first US insurance company to do so. Chubb will not sell new insurance policies to companies that build or operate coal power plants, or those that generate more than 30 percent of their revenue from coal mining or supplying coal-fired electricity. It will also stop investing in such companies because of their contribution to the global climate crisis. The insurer said its existing investments and insurance policies with coal-powered companies and miners would be phased out by 2022.
Evan Greenberg, chair and CEO of Chubb, said: ‘Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet.’ At least a third of the global reinsurance market has restricted its cover for coal, with the reinsurance firms Swiss Re and Munich Re limiting their underwriting last year.
– According to Reuters, natural gas producer EQT Corp’s largest shareholder on Monday gave its backing to the director nominees of Toby and Derek Rice, the two brothers who sold their company to EQT and are pushing for changes to its board. T Rowe Price Associates said it plans to vote for the Rice brothers’ slate of nominees at the AGM on July 10.
The Rice brothers already have the support of DE Shaw Group and Kensico Capital Management, EQT’s fourth-largest and sixth-largest shareholders, respectively. EQT did not respond immediately to a request for comment.
– The Wall Street Journal said that a group of investors is buying railroad operator Genesee & Wyoming for roughly $6.5 billion, a transaction that will take the company private after it acquired more than 100 smaller railroads over the past two decades. Affiliates of Brookfield Infrastructure Partners and Singapore sovereign wealth fund GIC are behind the deal.
Blue Harbour Group, which owns roughly 2 million shares of Genesee & Wyoming, applauded the deal.
– Anheuser-Busch InBev (AB InBev) is hoping to raise up to $9.8 billion when it lists its Asia business – Budweiser Brewing Company APAC – in Hong Kong in the biggest IPO of the year, according to CNN. The biggest IPO of the year so far, by Uber in May in New York, raised $8.1 billion. AB InBev CEO Carlos Brito suggested in late June that listing in Asia could lead to acquisitions in the region.
‘The number one reason to do the listing is to have a platform in the region that is seen as closer to those markets and connected to what the region will do, as that’s something that can be attractive to local groups,’ Brito said. AB InBev declined to comment further.
– CNBC reported that former Food and Drug Administration (FDA) commissioner Scott Gottlieb defended his decision to join Pfizer’s board of directors just two months after stepping down from the agency that regulates the drug-maker. He said in an interview that he feels ‘very confident’ about his record at the FDA and is ‘very proud’ of his new role.
‘I feel very confident about my record at the agency, and I called balls and strikes and acted in the interest of public health and public interest,’ Gottlieb said. He previously worked in the biotech sector as a venture capitalist. ‘I’ve largely returned to my work prior to the FDA,’ he said.
– The SEC announced that the agency’s division of corporation finance will host a roundtable on July 18 to seek input from investors, companies and other market participants about the impact of short-termism on capital markets and whether the SEC’s reporting system and regulatory framework needs changing.
– CNN reported that Bruce Linton, one of the most well-known executives in the cannabis industry, is stepping down as co-CEO of Canopy Growth and is leaving the board. Linton said he was terminated by the company. Canopy was not immediately available for further comment.
‘Creating Canopy Growth began with an abandoned chocolate factory and a vision,’ Linton said in a statement. ‘The board decided today and I agreed: my turn is over.’ Canopy said Linton’s fellow co-CEO Mark Zekulin will become sole CEO but that the company is looking for a new person to take over that role permanently.
– UK public companies and pension funds may have to disclose by 2022 the risks their businesses face from climate change under a new Green Finance Strategy, according to Reuters. The UK has become the first G7 country to sign into law a requirement to reach net-zero emissions by 2050 and the Green Finance Strategy describes plans to increase investment in sustainable projects and infrastructure.
The government paper builds on disclosure on climate risks set out by the G20 Task Force on Climate-related Financial Disclosures. ‘The reallocation of tens of trillions of dollars of capital toward green investment offers the potential to reshape cities, energy systems and land use around the world. The nature of this investment... will determine the future of our climate,’ the report states. ‘This includes setting expectations for publicly listed companies and large asset owners to disclose by 2022 how climate-change risk impacts their activities.’
The report said the government would work with regulators to determine whether mandatory disclosures were needed, rather than the existing voluntary system.
– BMW said Friday that Harald Krüger is standing down after four years as CEO, CNN reported. The company’s board will address the matter of succession during a meeting this month. Krüger has worked at the car-maker for nearly three decades. He thanked employees for their efforts in a statement and said he was leaving to ‘pursue new professional endeavors’, adding: ‘Over the last years, the automotive industry has been shaped by enormous changes, which have brought about more transformation than in the previous 30 years.’
– Proxy advisory firm Egan-Jones Ratings recommended that investors in EQT Corp vote in favor of nominees put forward by shareholders Toby and Derek Rice, according to Reuters. Egan-Jones’ recommendation follows support for the Rice slate of nominees from ISS and top shareholders T Rowe Price, DE Shaw and Kensico Capital Management. Glass Lewis has recommended EQT investors vote in favor of the company’s board nominees.
EQT has repeatedly urged shareholders to vote for its own slate of directors, stating that management has improved the company’s financial and operating results while reducing costs in the last six months. The company did not immediately respond to a request for comment.
– According to the WSJ, French authorities are encouraging companies to conduct internal investigations when seeking to settle allegations of some financial crimes. The shift is the latest in a series of reforms that brings French practices closer to the US model of corporate crime and punishment. Guidance explaining how such internal probes can help companies secure negotiated settlements was released by France’s financial prosecutors and a new anti-corruption agency.
Without a way to strike out-of-court deals with corporations, French prosecutors have traditionally brought them to trial.