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Sep 10, 2021

The week in GRC: ‘Mission-driven’ companies plan for IPOs and Amazon to pay workers’ college fees

This week’s governance, compliance and risk-management stories from around the web

Reuters reported that ExxonMobil said it will begin measuring methane emissions from production of natural gas at a New Mexico facility. The company, facing pressure from investors and environmentalists to address climate change, follows other shale producers in offering independently verified emissions data to buyers seeking to reduce their own carbon footprints.

Exxon said it had signed an agreement with independent measuring firm MiQ to certify 200 mn cubic feet of natural gas per day produced at its Poker Lake facilities in New Mexico. ‘Certifying our natural gas will help our customers achieve their goals,’ said Bart Cahir, a senior vice president at ExxonMobil, in a statement.

The Wall Street Journal spoke with Andreas Barckow, the new head of the International Accounting Standards Board, about setting his priorities for the rule-maker, including potentially changing requirements around intangible assets and weighing in on sustainability disclosure. The organization sets international financial reporting standards that apply in more than 140 jurisdictions around the world, though not in the US.

– Investment campaign group ShareAction said Europe’s 25 largest banks are failing to present comprehensive plans that address both the climate crisis and biodiversity loss, putting their sustainability pledges in doubt, according to The Guardian.

Although some banks are demonstrating leadership on specific issues – such as net-zero targets and policies restricting financing for new fossil fuel production – ShareAction found that none of the banks it reviewed were taking action across all key areas. Those are: biodiversity, exposure to high-carbon sectors, policies restricting services to sectors such as oil and gas, and linking executive pay to progress on climate issues. ShareAction said banks should expect protest votes against their directors unless they start following best practices of their peers.

Banking lobby group UK Finance said the industry fully supports the government’s goal of reaching net-zero climate emissions by 2050 and has a key role to play in the transition to a low-carbon economy. ‘Lenders are putting climate responsibility at the core of their strategies and making net-zero commitments, and have already introduced a range of green finance options across their operations,’ it added.

CNN reported that video game company Tripwire Interactive’s CEO John Gibson stepped down after his support of the new Texas abortion law created a firestorm. Tripwire said in a statement that Gibson had stepped down and that his views didn’t reflect those of the company. ‘His comments disregarded the values of our whole team, our partners and much of our broader community,’ the company said. ‘Our leadership team at Tripwire are deeply sorry and are unified in our commitment to take swift action and to foster a more positive environment.’

Gibson, a co-founder of Tripwire, applauded the controversial Texas law that bars abortions after six weeks, before many women know they are pregnant. A number of large companies have announced efforts to push back on the law. Neither Gibson nor Tripwire responded to requests for further comment. Tripwire announced that co-founding member and vice president Alan Wilson is taking over as interim CEO.

– According to the WSJ, Coinbase Global said the SEC is investigating the company over a lending program Coinbase plans to market and has indicated it would sue the company over the offering. Coinbase co-founder and CEO Brian Armstrong disclosed the dispute in a series of tweets. He called the SEC’s actions ‘sketchy’ and ‘intimidation tactics behind closed doors,’ and said other crypto companies are able to offer such programs.

Coinbase disputes that its program would constitute an investment contract that should be overseen by the SEC. Regulators recently gave Coinbase official notice that they plan to take civil enforcement action over the program, the company wrote in a blog post. Coinbase said its interactions with the SEC began about six months ago. An SEC spokesperson declined to comment.

– The WSJ reported that a new generation of companies are planning to go public this fall with the message that it isn’t just about the money, it’s also about the mission. In regulatory filings, companies are referring to themselves as ‘mission-driven,’ counting the environment among stakeholders, highlighting their commitments to charity and touting their sustainable methods.

‘Thirty years ago, the goal of a company was to serve shareholders. That’s evolved,’ said John Chirico, co-head of North American banking, capital markets and advisory at Citigroup. ‘Everyone is trying to be mission-driven these days. Some companies are founded on that mission. Others have come around to it, and others are not as authentic.’

Reuters reported that Box said it won a proxy contest against Starboard Value after the cloud services provider’s shareholders backed all three board directors the hedge fund firm was challenging. Shareholders re-elected Aaron Levie, Box’s co-founder and CEO, as well as directors Peter Leav and Dana Evan to the company’s 10-member board. The vote was a blow to Starboard, which criticized Box again this year after having settled with the company last year. Prior to this, Starboard had not lost a proxy vote in nearly a decade.

Box promised after the vote to ‘remain focused on continuing to transform [the company].’ Starboard said in a letter to shareholders that the results were skewed ‘by the voting rights tied to preferred equity financing and the use of stockholder capital to aggressively repurchase shares ahead of the record date from stockholders likely to support change.’

The vote tally remains preliminary but, according to two people familiar with the matter, Starboard received less than 15 percent of the outstanding shares, excluding its own.

– Microsoft said it will indefinitely delay the reopening of its headquarters in Redmond, Washington, and its other US offices as Covid-19 continues to proliferate across the country, CNBC reported. The company did not provide a new date to replace the October 4 target it had announced in early August. The decision, which will affect more than 103,000 Microsoft employees, reflects the cautious approach large technology companies are taking to bringing employees back to facilities following a rise in hospitalizations and deaths tied to Covid-19.

CNN reported that Amazon is offering to cover four-year college tuition for most of its roughly 750,000 hourly workers in the US, as the large company offers the perk to attract and retain hourly employees in a tight job market. Starting in January, Amazon will pay for tuition, fees and books for warehouse, transportation and other hourly employees who want to pursue bachelor’s degrees.

– The WSJ reported that, according to a spokesperson for the US Department of the Treasury, the Biden administration expects to complete its sanctions policy review this fall, as some human rights and humanitarian groups express concern about how long the review is taking and the level of engagement with non-governmental organizations. The sanctions policy review focuses in part on whether US sanctions programs are achieving their stated goals and on potential unintended consequences, such as the blocking of food, medicine or other humanitarian supplies.

A senior White House official said in March the review could take months and the administration wouldn’t ‘be able to complete our review until we really had a chance to have all of our senior officials in place in order to get a steer from them.’ Brian Nelson, President Joe Biden’s nominee for the Treasury undersecretary for terrorism and financial crimes, is still waiting to be confirmed by the US Senate. Nelson said during a confirmation hearing in June that he would focus on the continuing review of sanctions programs if confirmed.

Ben Maiden

Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...