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Annual Engagement Report, 2018QUARTERLY ENGAGEMENTREPORT2020:1
Sustainalytics 2020This report summarizes the shareholder engagement activities that Sustainalytics performed on behalfof Erste Asset Management during December 2019 to February 2020. Use of and access to thisinformation is limited to clients of Sustainalytics and is subject to Sustainalytics legal terms andconditions.Cover: All graphics used are part of the public domain under the Creative Commons license CC0 or havebeen procured by Sustainalytics.1
Sustainalytics 2020TABLE OF CONTENTSENGAGEMENT BRIEF3ENGAGEMENT SUMMARY REPORT52COMPANY DIALOGUE & PROGRESS SUMMARY53RESOLVED LIST54ENGAGE LIST58EVALUATE LIST82DISENGAGE LIST83OUR APPROACH86ABOUT ERSTE ASSET MANAGEMENT872
Sustainalytics 2020ENGAGEMENT BRIEFEXECUTIVE SUMMARYSince May 2019, Sustainalytics developed Global StandardsEngagement as an overlay to the Global Standards Screeningservice, including an expanded scope within the business ethicsarea, we have assessed the engagement potential of around140 new engage cases. We also started engagements on severalnew companies involved in controversies that occurred duringthis period. All together, we decided to engage on around 110issues. Several cases were closed after in-depth assessmentsand company dialogues, concluding that further engagementefforts were not warranted.Concluded engagementsIn the last three months, we successfully concludedengagement with seven companies: A Brazilian company accused of corrupt practices. A tobacco company accused of labour right violationsat plantations in Bangladesh and Indonesia. Two South-Korean companies involved in controversialproject in Myanmar. A Chinese company involved in two fatal workplaceaccidents. A company linked to labour rights violation onIndonesian palm oil plantations. A US company which faced accusation of workplaceharassment.During the same period, Sustainalytics started engagementswith 40 companies from different sectors over a range of issues.They include 25 companies accused of business ethicsmisconduct, two companies involved in environmentalviolations, 10 engagements on human rights and threecompanies linked to labour rights violations.Business ethics casesSince December, we initiated engagements with five companiesinvolved in corrupt practices and three accused of moneylaundering. In addition, we started engaging with companieslinked to accounting fraud, general fraud and competition. As aresult, we entered into engagement dialogue with sixcompanies accused of accounting fraud, four companies fromfinancial sector involved in fraudulent practices in general andthree accused of anti-competitive behaviour. Furthermore,additional four engagement cases on consumer fraud hasstarted.3
Sustainalytics 2020Environmental norms violations casesWe initiated two new engagements on companies linked todeforestation, which is considered to have a strong contributionto climate change and negative impacts on biodiversity. Onecompany supplies soy from South America, and another hasbeen involved in illegal logging controversies in southeast Asianand African countries.Human rights casesWith regards to human rights, Sustainalytics startedengagements with three companies, which are involved inoperations in high-risk and conflict-affected countries. Inaddition, Sustainalytics started engaging with six companiesinvolved in consumer rights controversies. This coversengagements with companies accused of product quality andsafety breaches; product-related fatalities and consumer fraud.We are also initiating engagement with a Chinese company,providing critical telecommunications equipment andcommunications surveillance technology to states with poorhuman rights records.Labour rights casesIn the previous three months, we started engaging with threecompanies linked to labour rights violations such as poorworking conditions, forced labour and a company involved insystemic health and safety workplace accidents.4
Sustainalytics 2020INDEX OF COMPANIES MENTIONED IN THIS ENGAGEMENT BRIEF1MALAYSIA DEVELOPMENT BERHAD131MDB GLOBAL INVESTMENTS1363 MOONS TECHNOLOGIES LTD14AB SUSTAIN8AL-FIRAT PETROLEUM COMPANY21AMAZON.COM INC14AMNESTY INTERNATIONAL12AUDI AG17BANAMEX22BARCLAYS PLC15BEZEQ THE ISRAEL TELECOMMUNICATIONCORPORATION LIMITED16BMW GROUP17BRF SA7BRITISH AMERICAN TOBACCO8CARGILL INC18CHANGCHUN CHANGSHENG LIFE SCIENCES18CHANGSHENG BIO-TECHNOLOGY CO LTD18CHINA HUARONG ASSET MANAGEMENT CO LTD19CHINA NATIONAL PETROLEUM CORP9CHINA PETROCHEMICAL CORPORATION20CHINA PETROLEUM & CHEMICAL CORP20CITIGROUP INC22COMMONWEALTH BANK OF AUSTRALIA22CONVOY GLOBAL HOLDINGS LTD23DAIMLER AG17DAR PETROLEUM OPERATING COMPANY21DIAMET CORP33DNO ASA25FINANCIAL TECHNOLOGIES INDIA LIMITED14FOX NEWS11G4S PLC26GITANJALI GEMS38HANERGY HOLDING GROUP27HANERGY THIN FILM POWER GROUP LIMITED27INDIVIOR INC28INDIVIOR PLC28INDO BERAS UNGGUL37INSYS THERAPEUTICS INC29IRAN ELECTRONIC INDUSTRIES34ISLAMIC REVOLUTION IRAN ELECTRONIC DEVELOPMENTCO34KANGDE INVESTMENT30KANGDE XIN COMPOSITE MATERIAL GROUP CO LTD 30LU THAI TEXTILE315
Sustainalytics 2020MCKESSON CORPMERCEDES-BENZMITSUBISHI ALUMINUM CO LTDMITSUBISHI CABLE INDUSTRIESMITSUBISHI MATERIALS CORPORATIONMITSUBISHI SHINDOH COMTN GROUP LIMITEDMTN IRANCELLMTN SYRIAMUMIAS SUGAR COMPANY LIMITEDOLYMPUS CORPORATIONOLYMPUS MEDICAL SYSTEMSPETROCHINA CO LTDPORSCHE AGPOSCOPOSCO INTERNATIONALPT TIGA PILAR SEJAHTERA FOOD TBKPUNJAB NATIONAL BANKQUINDELLRESERVE BANK OF INDIASAMLING GLOBAL LIMITEDSAUDI ARABIAN OIL COSLATER & GORDON’SSMART AUTOMOBILESOUTH-EAST ASIA GAS PIPELINE COMPANYTACHIBANA METAL MANUFACTURING CO LTDTACHIBANA METAL MFG CO LTDTELEFONAKTIEBOLAGET LM ERICSSONTHE GOLDMAN SACHS GROUP INCTHE QUOTED COMPANIES ALLIANCETONGAAT HULETT LIMITEDTOSHIBA CORPTOSHIBA IT-SERVICESTRUE SURPLUS INTERNATIONALUNITECH LIMITEDVOLKSWAGEN AGWALLA!WALT DISNEY COWATCHSTONE GROUP PLCWESTPAC BANKING CORPORATIONWILMAR INTERNATIONAL LIMITEDWOCKHARDT LIMITEDYESZHEJIANG HUAHAI PHARMACEUTICALS CO LTDZTE 6
Sustainalytics 2020BRF SACorrupt PracticesEnrique FigalloSenior AssociateStatus: ResolvedContribution to SDGs:BRF SA is an international producer of fresh and frozen animalprotein foods. The product portfolio includes marinated, frozen,whole and cut meat, specialty meats, portioned products, andfrozen prepared entrees.In 2017, federal authorities in Brazil launched the investigationOperação Carne Fraca into a corruption scheme targeting thenation’s largest meat producers, including BRF. Reportedly, BRFfaced allegations of distributing contaminated meat productsand bribing health inspectors to conceal the wrongdoing. ABrazilian police investigation claimed that four shipments ofexported BRF meat contained salmonella and/or includedadulterants to mask the meat’s spoilage.The investigation by the Brazilian authorities is ongoing, with BRFcooperating and discussing a potential leniency deal. As part ofthe cooperation, in October 2019, BRF admitted to paying aboutUSD 4.5 million in bribes until 2017 to 57 federal auditorsworking for Brazil’s MINISTRY OF AGRICULTURE in nine states.The company stated that the people involved in the scheme areno longer working at BRF.Since the start of the police investigation, Sustainalytics was indialogue with the company and had several conference calls andmeetings onsite with BRF’s compliance team to betterunderstand the measures undertaken to improve the company’scompliance system.In 2018, BRF also clarified that it had an anti-corruptionprogramme in place and was working on refining a number ofinitiatives designed to strengthen the company’s ethics andintegrity framework. During 2019, the company described that ithad created a transparency committee to follow up on theinternal investigation and a new compliance structure led by achief compliance officer, and that it had developed an IntegritySystem including compliance-related risk assessments, a varietyof internal controls and policies, online and onsite anticorruption training for all employees, and a whistleblowersystem.In February 2020, BRF explained that it has implemented newpolicies and procedures to address potential risks, improvedinternal controls when doing business with third parties,reduced the time to investigate and close cases reportedthrough the whistle-blower system, and conducted an externalassessment of its compliance system to identify potential gaps.Even though the investigation is still ongoing, BRF has shown7
Sustainalytics 2020willingness to collaborate with authorities and investors toaddress any concerns.Overall, these positive developments show that the company ismore aware of its corruption risk exposure and it isimplementing internal procedures and controls to bettermitigate these risks as much as possible. Considering theseimprovements, Sustainalytics has decided to resolve the case oncorruption practices. Meanwhile, Sustainalytics will continueengaging with the company regarding its food quality and safetypolicies and processes as part of the consumer fraud case.BRITISH AMERICANTOBACCO PLCLabour Rights Violations atPlantationsEwelina ŁukasikMorawskaManagerStatus: ResolvedContribution to SDGs:In 2016 and 2017, NGOs and the media reported labour rightsviolations in BRITISH AMERICAN TOBACCO’s (BAT) supply chainin Bangladesh and Indonesia. The allegations included the use ofchild labour, debt bondage, as well as adverse health impacts ofpesticides on workers.Sustainalytics engaged with BAT following the reports. Inresponse to Sustainalytics, BAT stated it had verified theallegations of labour rights violations with its local subsidiaries inBangladesh. BAT explained that its internal investigation had notprovided any evidence supporting the allegations presented inthe report. In addition, BAT highlighted the fact that the annualself-assessment and on-site reviews conducted every four yearsby an independent body, AB SUSTAIN, did not reveal anynoncompliance either. Furthermore, the company explainedthat it addresses social and environmental issues associated withgrowing and processing tobacco through its Social Responsibilityin Tobacco Production Programme.In 2019, BAT informed Sustainalytics about the progress made inimplementing two programmes across its supply chain: theSustainable Tobacco Programme (STP) and THRIVE, a sustainableagriculture and farmer livelihoods programme. BAT uses theresults to develop action plans and targets including informingmulti-stakeholder partnerships and community-based projectsfocused on longer-term issues and root causes. One of the mainachievements of the STP programme is that all suppliers havebeen independently reviewed on site over the last three years.As such, around 98 per cent of BAT’s farmer base have now beenmonitored.Due to the measures taken by BAT to address labour issues,Sustainalytics regards the case as resolved.8
Sustainalytics 2020PETROCHINA CO LTDFatal AccidentsK Bruce JacksonAssociate DirectorPETROCHINA CO LTD (PetroChina) is the listed subsidiary ofCHINA NATIONAL PETROLEUM CORP (CNPC). Based upon mediareports, the company experienced two pipeline explosions in2017 and 2018, both explosions took place on the same naturalgas pipeline, in Qinglong county, Guizhou province in China,which is owned and operated by PetroChina.The two explosions accounted for eight fatalities and over 60injuries of which at least eight were considered critical. Thecauses of the accident were due to a pipe being crushed by alandslide and in the second incident a gas leak that was ignited.Status: ResolvedContribution to SDGs:In December 2019, the company provided extensive writtenanswers to the questions raised on the agenda in relation tohealth and safety issues.PetroChina has implemented a strict Health, Safety andEnvironment (HSE) Management System, which is overseen andmonitored by an HSE Committee. The committee also overseesthe investigation of major incidents. The company highlightedthe importance of risk management and control, with a focus onenhancing execution and standardising its procedures.PetroChina undertakes training on system development, HSEsystem audits, safety management and emergency processing toemployees. It has also strengthened its HSE training of suppliersand subcontractors. Sub-contractors are furthermore included inPetroChina’s safety management and the company conductsfull-process management of its access, selection, training, use,evaluation and assessment, guiding suppliers to operate inaccordance with the law and standardising safety production.Also, HSE performance is reviewed regularly to prevent andreduce accidents by suppliers and contractors. The company hasstrengthened the trainings for contractors and unify thestandards, requirements as well as rewards systems. It alsocarries out system audits twice a year on all units.PetroChina’s disclosure has improved and refers to the UnitedNations Sustainable Development Goals (UNSDGs) which it usesas a benchmark to assess company performance. It also reportson mental health along with safety and security in the latest ESGreport. Based upon the considerable number of improvementsundertaken by PetroChina in regards to governance, trainingcombined with a general decline in HSE statistics in the last fewyears, Sustainalytics considers the case to be resolved.9
Sustainalytics 2020POSCO/POSCOINTERNATIONALProject Resulting inEnvironmental and HumanRights ImpactEwelina ŁukasikMorawskaManagerStatus: ResovedContribution to SDGs:POSCO INTERNATIONAL, a subsidiary of POSCO, is the operatorof the Shwe project relating to the production of petroleum andthe offshore transportation of natural gas from the gas fields offthe coast of Rakhine State in Burma. It also holds 25 per cent ofthe SOUTH-EAST ASIA GAS PIPELINE COMPANY (SEAGP), which isthe operator of the overland pipeline that runs from PoscoInternational’s onshore gas terminal to the border betweenBurma and China.In April 2013, the NGO EARTH RIGHTS INTERNATIONAL publisheda report claiming that the project disrupted traditionalsubsistence agriculture and fishing communities and wasassociated with human rights violations, and the displacement ofvillagers.In January 2014, Posco International announced that it hadlaunched production activities at the Shwe gas field. Thecompany further stated it had reached an agreement with thefarmers protesting over damages from the project and had paidcompensation after a series of direct dialogues with the affectedvillagers. In 2018 and 2019, an Environmental and Social ImpactAssessment (ESIA) Report was conduted to verify the potentialinfluences of the second phase Shwe development project inMyanmar on the nearby natural environment and regionalsociety and to prepare the methods and measures to mitigatesuch influences.Over the course of the engagement, Sustainalytics held regularmeetings and conference calls with Posco and PoscoInternational. Following the accusations of human rights issueslinked to the Shwe project, Posco International committed itselfto preventing human rights abuses and to supporting the peoplein Myanmar in line with its Code of Corporate Conduct andEthics. Posco International and its contractors have beenminimising the impact of the development works on the localpopulation and have compensated all affected communities.Also, the company has performed an Environmental ImpactAssessment (EIA) and Social Impact Assessment (SIA) in theproject areas to avoid or mitigate any anticipated social orenvironmental risks.Posco International has performed all the procedures accordingto the Environmental Conservation Law and Guidelines ofMyanmar and the MINISTRY OF NATURAL RESOURCES ANDENVIRONMENTAL CONSERVATION’s (MONREC) EnvironmentalCompliance Certificate (ECC). The reports conclude that nomajor impacts are anticipated from the project and all potentialimpacts have been properly mitigated.10
Sustainalytics 2020Posco International has committed itself to minimising risks tothe natural environment and indigenous people of the projectarea, and a continuous monitoring of any such risks during theprogress of the development project. The company alsoperiodically publishes an analysis report which presents theresults of the monitoring outcomes. Since 2017, a grievancemechanism in project operated areas has been established andstakeholder engagement meetings have been organized with allrelevant stakeholders. In June 2019, Posco Internationalpublished a report titled EIA for the Exploration Drilling in BlockA-3. The company is currently implementing therecommendations from the EIA report.Even though the company is still in the process of implementingits commitments, Sustainalytics has evaluated the progressmade as positive and has decided to resolve the case.WALT DISNEY COWorkplace HarassmentEllinor HaggebrinkManagerStatus: ResolvedContribution to SDGs:FOX NEWS (acquired by WALT DISNEY CO in March 2019) wasassociated with several instances of sexual harassment in the USbetween 2002-2017. In September 2016, the company issued apublic apology and agreed to pay USD 20 million in a settlementthat followed allegations from a former Fox News TV host.Allegedly, the TV host was wrongfully fired after she had rejectedadvances of Fox News’ chairman and CEO. When the allegationssurfaced, the executive resigned. Several other women alsocame forward with similar accusations against the ex-CEO, andsome of them entered into smaller settlements with Fox News.There were allegations that other senior executives abetted hisbehaviour. Additionally, it was revealed that five women hadreceived payments totalling about USD 13 million between 20022016 in exchange for agreeing not to pursue litigation related tosexual harassment or inappropriate behaviour against FoxNews’s top TV hosts.Since the allegations appeared, Fox News has made severalefforts to address the issues. The company has strengthened itsStandards of Business Conduct, by adding specific informationand content about sexual harassment and discrimination totraining programmes both for corporate workers and topmanagement. The company uses external hotline providers tomanage incoming claims and discusses those claims duringboard meetings, which is a sign that it takes sexual harassmentallegations seriously.11
Sustainalytics 2020The efforts have led to improvements in the corporate cultureand a drop in harassment and discrimination claims, with nosevere allegations being reported since. Given the abovedevelopments and the fact that there are no outstanding issues,Sustainalytics has decided to resolve the case.WILMARINTERNATIONALLIMITEDLabour Rights Violations atPlantationsEwelina ŁukasikMorawskaIn December 2016, AMNESTY INTERNATIONAL (AI) reportedlabour rights violations on Indonesian palm oil plantationsowned by subsidiaries and suppliers of WILMAR INTERNATIONALLIMITED (Wilmar). AI interviewed 120 plantation workers, adultsand children. Reportedly, many workers brought their childrento help them in their work in order to meet high targets. AI'sinvestigation also revealed: exposure to hazardous substances,such as paraquat which is banned in the European Union andrestricted in several other countries; a lack of safety equipment;low wages and long working hours. Instances of forced labourwere also allegedly found.ManagerStatus: ResolvedContribution to SDGs:Over the course of the engagement, Sustainalytics held regularconference calls to discuss the company’s efforts to addresslabour rights issues in its supply chain. Following the allegations,Wilmar launched an internal investigation to verify the labourissues raised in the AI report. Wilmar stated that it hascommitted to addressing the labour issues in its NoDeforestation, No Peat and No Exploitation (NDPE) policy.Wilmar has also established a grievance procedure, which allowsany stakeholder to raise suspected breaches to Wilmar’s NDPEPolicy, including those related to human and labour rights.Currently, the company is focused on implementing a labourrights programme covering its entire oil palm growing operationsin Indonesia. In November 2017, Wilmar launched a ChildProtection Policy to protect children living in oil palm plantationswhere their parents work. The policy has been implementedthroughout Wilmar’s global operations, including its jointventures, third-party suppliers and contractors.Wilmar has actively addressed known issues and implementedpolicies and management systems to improve labour rightsconditions in the supply chain. The company has due diligenceand a set of comprehensive policies in place in relation to labourrights.12
Sustainalytics 2020Due to the measures taken by Wilmar to address labour issues,Sustainalytics regards the case as resolved. However, Wilmar’songoing involvement in controversies over land rights mightindicate that the effectiveness and implementation of its policiescould be strengthened further. Thus, Sustainalytics will continueengaging with the company on this specific issue.1MDB GLOBALINVESTMENTSEmbezzlementDavid FrazerManagerStatus: EngageSince 2015, 1MALAYSIA DEVELOPMENT BERHAD (1MDB), a stateinvestment fund and the parent company of 1MDB GLOBALINVESTMENTS, has been under investigation around the worldover a multibillion-dollar global corruption and moneylaundering scandal.As reported, between 2009 and 2015, about USD 4.5 billion of1MDB’s funds were allegedly misappropriated by its high-levelofficials, including Najib Razak, the former Prime Minister ofMalaysia and the founder and chairman of 1MDB. According tothe media, several corrupt 1MDB officials treated the fund as apersonal bank account to finance their spending sprees andpolitical initiatives.Contribution to SDGs:At least ten countries' regulators, including the US DEPARTMENTOF JUSTICE (DOJ), launched investigations and have been tryingto trace how money flowed through and around 1MDB andillegally into personal accounts. Reportedly, about USD 700million landed in Najib’s bank account. In addition, the DOJidentified about USD 1.7 billion in assets that had been illegallyacquired through money diverted from 1MDB, including realestate, art and a luxury yacht. Najib lost the election in May 2018and the newly appointed prime minister reopened a previouslyclosed probe over the 1MDB scandal. Subsequently, Najib wasarrested and over 40 criminal charges were laid against him inMalaysia.Due to the severity of the accusations and the fact that thecompany does not have any proper policies and programmesrelated to corruption and embezzlement, Sustainalytics decidedto engage with the company. The focus will be on executiveoversight and internal controls to prevent embezzelement.13
Sustainalytics 202063 MOONSTECHNOLOGIES LTDFraudOlga KostyurinaManagerStatus: Engage63 MOONS TECHNOLOGIES LTD (63 Moons) is an Indian financialservices company formerly known as FINANCIAL TECHNOLOGIESINDIA LIMITED (FTIL). The company’s activities are focused oncomputer programming, consultancy and related services. 63Moons offers technology and expertise to create and trade onnext-generation financial markets.The NATIONAL SPOT EXCHANGE LIMITED (NSEL), a subsidiary of63 Moons, was a commodity spot exchange based in India. In July2013, after some members of the exchange defaulted, it wasrevealed that most of the underlying commodities traded inNSEL did not exist. Approximately 13,000 investors operating inthe spot commodity exchange were affected, with lossesestimated at INR 56 billion (USD 900 million).Contribution to SDGs:Trading at NSEL has been suspended since this information cameto light. In October 2013, several executives in NSEL werearrested for the systematic and premeditated fraud.Subsequently, the SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI) declared that 63 Moons was ineligible to hold any stake inmarket infrastructure institutions and was ordered to divestfrom these institutions within four weeks. The SECURITIESAPPELLATE TRIBUNAL dismissed 63 Moons’s plea against theSEBI order.After the case erupted, the MINISTRY OF CORPORATE AFFAIRSOF INDIA (MCA) issued a final order for the merger of scandal-hitNSEL and its parent FTIL. This compulsory amalgamation of thesecompanies was challenged in court by 63 Moons. At the end ofApril 2019, the Supreme Court of India sided with 63 Moons as itdid not consider the forced amalgamation to be in the publicinterest thereby undoing the original MCA decision. The mergerorder did not offer compensation to 63 Moons’s shareholdersand debtors, thereby failing a prerequisite for passing such anorder.Sustainalytics will approach 63 Moons to discuss its currentinvolvement in exchange businesses and improvements ininternal controls.AMAZON.COM INCWorkplace Accident(s)AMAZON.COM INC’s (Amazon) concerning record of health andsafety issues and labour controversies has been persistent for anumber of years. The issues primarily concern its facilities in theUS but also show signs of being present in its global operations.They include employee fatalities, physical injuries at rates that14
Sustainalytics 2020Matthew BargAssociate DirectorStatus: EngageContribution to SDGs:reportedly exceed the industry average, local resident fatalitiescaused by contractor delivery truck drivers, as well as allegationsof poor and stressful working conditions that negatively affectthe mental health of staff. For many of the workers injured atwork, the health impact was permanent and left them unable towork. Reportedly, Amazon has been at the center of thousandsof workers’ compensation lawsuits over the last several years.Some of them were by workers who were denied or faceddelayed benefits after sustaining workplace injuries.Amazon has also faced criticism by a range of socialorganizations. For two years in a row—2018 and 2019—Amazonwas included in the Dirty Dozen report by the NATIONALCOUNCIL FOR OCCUPATIONAL SAFETY AND HEALTH, which eachyear lists the 12 most dangerous places to work in the US. Thecompanies included in the report represented a range ofindustries and cases. However, the criteria for inclusion in thereport included exposure to unnecessary and preventable risk,repeated citations by state and federal authorities, as well as alack of activity to improve the situation and severity of injuries.A pattern of labour issues in the company’s record has continuedfor several years and includes a high number of fatalities andinjuries for the retail industry. Amazon maintains a fair level ofpreparedness to address human rights in its supply chain anddiscloses some programs addressing occupational health andsafety (OHS) risks in its warehouses. However, it has generallystruck a tone of resistance when presented with allegations ofissues within its own operations. The company’s disclosure stillshows gaps with respect to in-depth risk assessment and duediligence for worker safety. There is also room to providetransparency around relevant performance statistics andmanagement systems.Sustainalytics has decided to engage with Amazon as a result ofthe accumulation of ongoing health and safety impacts,employee lawsuits, and criticism from external stakeholders.BARCLAYS PLCCorrupt PracticesBARCLAYS PLC is facing ongoing scrutiny over its whistleblowerpractices, as well as investigations and lawsuits related to marketmanipulation. In 2017, the bank was investigated over its CEO’sattempts to identify an anonymous whistleblower who hadraised concerns about a senior manager’s recruitment.15
Sustainalytics 2020David FrazerManagerStatus: EngageContribution to SDGs:In 2018, Barclays settled with the UK’s FINANCIAL CONDUCTAUTHORITY (FCA), reducing its CEO’s bonus and agreeing toreport annually on its whistleblower practices. However,Barclays was fined USD 15 million by US regulators in December2018. The bank was required to report to the NEW YORKDEPARTMENT OF FINANCIAL SERVICES (NYDFS) on additionalwhistleblowing complainant details by end of March 2019. TheNYDFS had not made that document public.Sustainalytics has decided to focus engagement with Barclays onits whistleblower policies, with a goal of confirming theimplementation of such policies.BEZEQ THE ISRAELTELECOMMUNICATIONCORPORATIONLIMITEDCorrupt PracticesMatthew BargAssociate DirectorBEZEQ THE ISRAEL TELECOMMUNICATION CORPORATIONLIMITED (Bezeq) has been investigated by Israeli authorities inrecent years in relation to corruption allegations and itsacquisition of YES, a subscription TV company. The investigationshave resulted in the arrests of the CEO, the chairman, a seniorexecutive, and some government officials. The corruption case,dubbed Case 4000, pertains to allegations that between 2012and 2017, Bezeq received favourable regulatory decisions fromthe Israeli MINISTRY OF COMMUNICATIONS. These decisionsresulted in alleged improper benefits of approximately USD 285million, in exchange for positive coverage of the Israeli PrimeMinister (PM) and his family on the news site WALLA!, owned byBezeq.Status: EngageContribution to SDGs:The favourable government decisions allegedly included theapproval of Bezeq’s USD 285 million acquisition of Yes in 2015, acompany in which Bezeq’s ex-chairman had an ownership stake.Case 4000, which originated from the ISRAEL SECURITIESAUTHORITY’s accounting probe into the involvement of the exchairman and others in Bezeq’s acquisition of Yes. In November2019, Israel's Attorney General formally charged the PM.Since the claims were brought against the company, it hasreplaced a considerable number of individuals in seniormanagement, including its CEO and two non-independent boardmembers. However, Bezeq has not been clear in how this case isbeing handled internally and has not made clear theimprovements in its anti-corruption programme, guidelines fordealing with political parties, or on media ethics policies orprogrammes.16
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mercedes-benz 24 mitsubishi aluminum co ltd 33 mitsubishi cable industries 33 mitsubishi materials corporation 33 mitsubishi shindoh co 33 mtn group limited 34 . punjab national bank 38 quindell 46 reserve bank of india 39 samling global limited 39 saudi arabian oil co 40 slater & gordon's 46
