Ethical Hub : Ethical Reviews - Ethical Investment Review March 2021

Climate Emergency

In March, Climate Action 100+, (we are investor participants) launched its benchmark of the largest corporate emitters. The benchmark assesses individual company performance against the initiative’s three high-level commitment goals: reducing greenhouse gas emissions, improving governance, and strengthening climate-related financial disclosures. While there is progress being made across sectors to make ambitious climate commitments, the benchmark shows there is still a long way to go in delivering on these pledges. We continue to engage with Anglo American as part of CA100+.

During the quarter, Royal Dutch Shell released its new strategy ‘Powering Progress’ which outlines its strategy to transition its business. As part of this strategy, Shell committed to become a net-zero emissions energy business by 2050, in step with society and its customers. The strategy and associated strategy day provided an opportunity for Royal Dutch Shell to outline the concrete steps in a transformation that would see it continue to be consistent with the Paris Accord. In this regard, the strategy proved to be a disappointment.


In January, the CFB & Epworth participated in an online event on the 2nd anniversary of the Brumadinho tailing dam disaster. As a reminder, this disaster happened when the tailings dam at the Córrego do Feijão iron ore mine failed, killing 270 people. The event recognised the progresses made of the past two years, but also that much was still to be done. Future steps for the collaboration include developing a 2030 Investor Agenda for the mining sector, which will cover issues including tailings waste, child labour, climate change as well as others.

Food parcels

The CFB & Epworth signed a joint letter to the Chief Executive of Compass Group to answer critical questions regarding the food parcels that families may receive in lieu of free school meals that had been provided by Compass Group subsidiary Chartwells. After social media and news coverage noted the inconsistent, meagre food portions, investors mobilised to seek reassurance that changes were being implemented at the company. Chartwells issued an apology and outlined steps it would be taking to rectify the situation.


The CFB & Epworth and representatives from the Joint Public Issues Team met with Nestlé to discuss breast milk substitutes (BMS) and other material sustainability issues. Following the Call to Action from the United Nations agencies and eight civil society organisations to all manufacturers of BMS, Nestlé has released its response, noting it will unilaterally stop promotion of infant formula for babies ages 0-6 months in all countries, with particular relevance to the USA, Canada, and Japan, where no regulations currently exist. We have a longstanding history in engaging with Nestlé in relation to BMS and is pleased to see the fruits of this engagement. The meeting provided the opportunity to discuss internal training at Nestlé on BMS, as well as the process for accreditation through ATNI and FTSE4Good. Also discussed in the meeting were Nestlé’s climate targets, farm animal welfare, and Fairtrade.

Access to Nutrition Index

In July 2020, the CFB became signatories to the ATNI’s Investor Expectations on Diets, Nutrition and Health. The report outlines four expectations related to corporate governance, strategy, lobbying, and transparency for food and beverage manufacturers and retailers. The CFB & Epworth co-filed a shareholder resolution at Tesco, calling for targets to increase the proportion of healthy products in its sales. Using Access to Nutrition Initiative research, it was found that Tesco lags its peers on reporting and encouraging healthy diets. Tesco has a 27% market share in the UK grocery market, and therefore has a key role to play in shaping the nation’s diet.

Access to Medicine

Recognising the critical nature of the COVID-19 vaccine in the fight against COVID-19, the CFB supported the call for an effect, fair and equitable global response to the roll out of the vaccine which was organised by the Access to Medicine Foundation. The response recognised that if the tools to fight COVID-19 were not distributed fairly, and the virus continues to spread in low- and middle-income countries, the additional impacts could be nearly twice as many deaths, and USD9.2 trillion in global economic losses.

Fair Tax Mark

The CFB & Epworth undertook a round of engagement with companies held in its UK portfolios to highlight the Fair Tax Mark, and to encourage companies to become accredited. Some of the corporate responses to this engagement highlighted the complexity and cost of attaining the Fair Tax Mark accreditation, particularly in the difficult environment of the COVID pandemic. Some were more positive, and we hope that some of our holdings will become accredited in the coming months as a result. Following our engagement with Ten Entertainment, a listed ten-pin bowling company, the company now publishes its tax policy online. The CFB & Epworth has also raised this with a number of other companies that it has met during 2020 and tax justice will continue to be on the agenda for company meetings in 2021.

Corporate Governance

During the quarter, the CFB, as part of the Church Investors Group (CIG), wrote to the leaders of FTSE 350 companies to inform them that it will be using its votes to push large companies to increase board diversity during the upcoming AGM season. The CIG believes that diverse teams are both fairer and better for investors. Following the recommendations of Hampton-Alexander Review on gender diversity and the Parker Review on ethnic diversity the CIG has broadened its expectations on board diversity. For the 2021 voting season, the voting policy has extended its diversity considerations to include ethnic diversity at board level and has increased its minimum expectations for gender diversity. The voting policy already holds companies to high standards on executive pay, climate change, and tax justice.