PIRC Limited

Once again, the shortcomings of a company's climate strategy have left a CEO in deep waters. This week's PIRC Alert delves into Berkshire Hathaway's energy division as it faces billions of dollars in liabilities over alleged forest fire involvement, leaving Warren Buffett questioning its future.   PacifiCorp, the conglomerate’s largest electric utility, could be liable for $8 billion in damages for allegedly contributing to the 2020 forest fires, which burnt hundreds of thousands of acres and led to deaths in the US Pacific Northwest.    Berkshire Hathaway’s approach to climate has been on PIRC's radar, having voiced concerns over the company's lack of emission reduction targets or commitment to net zero in its proxy report to clients last year. 

Last week’s complimentary PIRC Alert story looks at the environmental impact of generative AI as Microsoft, Google and Meta have substantially increased their water consumption over recent years to cool down data centres in the race to produce AI products. With Microsoft having increased its water consumption 34% in 2022, Google 22% and Meta 3%, academics suggest that AI demand would drive up water withdrawal to between 4.2 billion and 6.6 billion cubic meters by 2027. Recognising the profound impact poor water stewardship has on ecosystems and societies, and ultimately investors, PIRC has followed this area closely, having engaged with companies to encourage effective water stewardship strategies, and supported a client file a resolution addressing water risk management. To subscribe, please contact [email protected].

After two years of trying to resist unionisation the coffee giant Starbucks and the union organising its US workers said yesterday they have agreed to begin talks with the aim of reaching labour agreements. This is undoubtedly a significant development and underscores PIRC's belief that a more constructive approach to employment relations was both desirable and achievable at Starbucks. Working with Merseyside Pension Fund and colleagues at Trillium, New York City Retirement Systems and SHARE, we have engaged the company to ensure that rights at work are respected and employees feel confident to exercise them. We are hopeful that this is a fresh start for all parties and it will be interesting to see what impact this has upon the decisions made at the company's upcoming AGM. https://lnkd.in/euVucg7v

PIRC is delighted to announce we have successfully retained our stewardship code signatory status as our 2023 Stewardship Report has been passed by the Financial Reporting Council (FRC). The report showcases the engagements we undertook on behalf of our clients and PIRC's impact on improving environmental, social and governance standards at some the world’s largest companies, as we work to improve stewardship practice on key themes including human rights issues in supply chains, nature-based solutions and biodiversity, and climate change. PIRC is one of the 273 signatories to the Code, representing £43.3 trillion AUM. PIRC's 2023 Stewardship Report: https://lnkd.in/erp48TBy https://lnkd.in/eWTsGWcP

This week’s complimentary PIRC alert story looks at the further evidence that support for environmental and social focused shareholder resolutions is falling. ShareAction’s recent analysis of asset managers’ voting behaviours has found that only 3% of the shareholder resolutions examined passed, down from 21% in 2021. This downward trend mirrors PIRC’s research which has shown support falling back in both 2022 and 2023 and across environmental, social and governance issues. To subscribe, please contact [email protected].

The opening of 2024 finds PIRC gearing up well in advance for the AGM season, particularly in the context of executive re-election. PIRC is considering whether to back the re-election of the bosses at the likes of Alphabet and Boeing. Such recommendations are not new at PIRC, having questioned the suitability of Vennells as director at Dunelm following the Post Office scandal in 2020. https://lnkd.in/emQnXMww

PIRC will be holding a short webinar with representatives from the International Labor Organisation on the Employment Injury Scheme (EIS) pilot in Bangladesh at 2pm GMT on Wednesday 13th December.   The EIS pilot has been established to provide a compensation scheme for workers in the ready-made garment (RMG) industry of Bangladesh. It provides income replacements for the permanently disabled and the dependents of deceased workers, covering all factories contributing to the export-oriented RMG sector. To date a number of major international brands have agreed to finance the EIS pilot, but more support is welcomed.   This webinar will provide an overview of the EIS pilot, how brands are responding and how investors can support the initiative.   Please register using the link below: https://lnkd.in/er5P9gRw

PIRC is delighted to have been chosen by ACCESS as its external environmental, social and governance (ESG) and responsible investment (RI) adviser. As part of the appointment, PIRC will provide stewardship advice on the Pool’s voting guidelines, its RI guidelines and on its stewardship reporting. Commenting on the appointment, PIRC’s managing director, Alan MacDougall, said: “We are extremely pleased to have been selected by ACCESS to support them meet their stewardship needs and ambitions. ACCESS has a clear set of priorities focused on delivering value and the views of its 11 LGPS Administering Authorities. We are therefore looking forward to using our ESG and LGPS expertise to work with ACCESS and the 11 Authorities to develop and strengthen the pool’s ESG and responsible investment policies and practices in line with their distinct stewardship approach and requirements.” Read the full press release here: https://lnkd.in/e5nhzkDW #ESG #responsibleinvestment #stewardship

This week’s complimentary PIRC Alert story looks at Greenpeace's call for German asset manager DWS to overhaul its remuneration structure, alleging that its current use of ESG targets is a factor in greenwashing. As well as driving higher pay through greenwashing, this structure risks rewarding executives for the direction of travel rather than tangible achievements in sustainability. PIRC agrees that using growth in AUM linked to ESG as a metric within executive pay is problematic and has flagged this exact issue in engagements with listed financial services companies. To subscribe, please contact [email protected].