Good day from London, the place local weather tech founders are a bit dejected. That’s the impression Simon and I obtained once we requested a dozen of them final week what it was like making an attempt to scale a enterprise within the UK.
Some complained about torturously gradual approval processes for presidency grants, and the dearth of curiosity by enterprise capital in supporting corporations beneath a sure scale. Others identified that the UK’s laxer hiring and firing legal guidelines and London’s expertise pool nonetheless gave it an edge.
However, wistful concerning the capital unlocked by the Inflation Discount Act on the opposite facet of the pond, some frightened that European buyers have grow to be much less eager on climate-related “{hardware}” corporations, that construct high-tech carbon storage or recycling services, for instance. Software program start-ups with tried-and-tested enterprise fashions centered on information assortment and accounting are simpler to pitch.
It’s not all gloomy over right here. The UK has awarded its first spherical of carbon dioxide storage licences to stash the gasoline in depleted oil and gasfields off the British coast, the FT’s clear power correspondent Rachel Millard wrote in her busy first week. And John Thornhill argued Europe may enhance its start-ups by “Frankensteining” Germany’s inventiveness with the UK’s tax credit score system and France’s financing establishments.
At this time, we convey you a narrative on race wars at insurers’ AGMs. Be part of us tomorrow for the primary day of our Ethical Cash Europe summit, the place Simon will kick issues off by interviewing the EU’s monetary companies chief Mairead McGuinness. (Kenza Bryan)
Insurers hit with vary of shareholder proposals
Insurers’ efficiency on ESG points is within the highlight this 12 months — and it’s not simply the local weather that buyers are frightened about.
Shareholders are asking US insurance coverage teams Hartford, Vacationers, Berkshire Hathaway and Chubb to behave sooner to guage human rights and race points, and to cease underwriting new oil and gasoline tasks, at annual conferences happening this month.
Shareholders at Vacationers will vote on Wednesday on whether or not it ought to conduct a full racial fairness audit of its employees and its underwriting practices, after an identical proposal obtained 47 per cent of votes solid final 12 months.
Trillium Asset Administration, which filed each proposals, stated the insurer had a smaller proportion of individuals of color on its boards than any of the opposite high 10 insurers within the US. Black individuals characterize simply 3 per cent of its senior management in contrast with 18 per cent of administrative assist employees, in keeping with 2021 information.
It additionally highlighted alleged discrimination in insurance coverage provision. A lawsuit settled by Vacationers in 2018 alleged that it had denied insurance coverage to landlords renting to households receiving revenue assist, that are disproportionately made up of black girls.
In a strongly worded response, the insurance coverage firm’s board of administrators argued conducting an audit would violate insurance coverage legal guidelines in a number of US states, which “prohibit the consideration of race in underwriting and pricing selections”. It additionally stated the audit would burn up an excessive amount of firm time given Vacationers already had a “considerate and complete” strategy to variety and inclusion.
Marine Esperandieu, a director on the consultancy SquareWell Companions, stated activist shareholders haven’t submitted the identical ESG-related proposals at insurers in Europe. One cause for that is that race is a “very US-centric subject . . . amplified by high-profile actions like Black Lives Matter”, she stated.
One other issue could also be that some European insurers have voluntarily adopted Say on Local weather proposals, and are taking the difficulty comparatively severely. As one group head of sustainability at an EU-based insurer informed me with some nervousness final week, “no person is with any diploma of confidence what the true impacts shall be . . . local weather science didn’t predict the variety of excessive occasions which can be taking place at this time”.
However that is solely the second 12 months that insurance coverage corporations within the US have needed to reckon with climate-themed resolutions, in an “unprecedented” recognition that insurers have been “society’s threat managers”, stated Mary Sweeters, a senior strategist on the campaigning group Insure Our Future. Within the US S&P 500, three out of the ten corporations focused by climate-related shareholder proposals for the 2023 AGM season have been insurers.
Out of 15 insurers globally who’ve adopted oil and gasoline exclusion insurance policies, just one, Chubb, was based mostly within the US, she added.
One of these activism remains to be comparatively untested floor. Shareholders who file local weather proposals should be ready to coach others concerning the function performed by the insurance coverage business, Andrea Ranger, shareholder advocate at Inexperienced Century Capital Administration, informed Ethical Cash.
The Boston-based asset supervisor’s proposal that insurers cease underwriting new oil and gasoline tasks was supported by lower than a fifth of the shares voted at Hartford, Vacationers and Chubb final 12 months (in any case three insurers fought unsuccessfully to maintain them off the poll).
Since then, the US backlash towards ESG investing has turned its hearth on insurance coverage corporations, after Texas Republican lawmaker Bryan Hughes reportedly wrote to massive insurers with issues about shareholder proposals concentrating on fossil gas enterprise.
Inexperienced Century watered down its calls for this 12 months, after institutional shareholders and proxy advisers informed it that these needs to be written in a extra versatile method. It’s calling for a part out of latest oil and gasoline tasks, fairly than a direct finish to underwriting.
Chubb made headlines in March when it stated would solely underwrite oil and gasoline tasks for purchasers that would show they’d plans to cut back methane emissions. A proposal by shareholder advocacy non-profit As You Sow for Chubb to set a goal to align underwriting, insurance coverage and funding actions with the objective of limiting world warming to 1.5C above pre-industrial ranges was backed by 29 per cent of votes solid at its AGM final week.
Vacationers declined to remark past the responses in its proxy statements. Berkshire Hathaway, Chubb and Hartford didn’t reply to a request for remark. (Kenza Bryan)
Good learn
Don’t miss Henry Mance’s interview with the economist Daniel Chandler, who argues a fairer distribution of energy inside the office may gain advantage each shareholders and the democracies they stay in.
Ethical Cash Summit Europe
Be part of us in London, or on-line, for the third annual Ethical Cash Summit Europe on Could 23-24. Main buyers, corporates and policymakers will come collectively to debate what must occur subsequent to unlock a extra sustainable, equitable and inclusive financial system.
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