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Public Engagement Report Q1 2024 

EOS Insight
29 April 2024 |
The Q1 Public Engagement Report from EOS at Federated Hermes focuses on carbon capture, utilisation and storage and the implications for companies relying on it to meet their net-zero emission targets. Plus, how the growth of sustainable bonds has reinforced the case for credit engagement.
EOS Public Engagement Report Q1 2024

Fast reading

  • EOS asks for clearer disclosure on CCUS strategies and associated risks, while monitoring progress at companies within hard-to-abate sectors.
  • The growth of the green bonds market has attracted greater regulatory scrutiny but also driven more acceptance and awareness of bondholder engagement.
  • Are Asian regulatory reforms helping to improve corporate governance and unlock shareholder value?

Proponents of carbon capture, utilisation, and storage (CCUS) argue that it will be a critical component in aligning with the Paris Agreement for hard-to-abate sectors such as energy, cement, and other industrials. This is due to technical challenges related to high heat requirements and carbon emissions. However, to date, attempts to commercialise CCUS at scale have disappointed.

In EOS’s Q1 2024 Public Engagement Report, EOS engagers Michael Yamoah and Shoa Hirosato weigh up the pros and cons of CCUS and examine the implications for companies and investors. “Most CCUS projects are still at the prototype or demonstration phase. Emerging research also shows that increasing the size of the CCUS project can lead to it being terminated or put on hold,” they state. “On a more positive note, government policies have emerged to help mobilise capital to demonstrate and drive CCUS market uptake.”

EOS has been engaging with companies across relevant sectors on their decarbonisation strategies and the role that CCUS plays within them. So far, it has discussed carbon capture with around 60 companies, particularly in the oil and gas, chemicals, utilities, and heavy industries sectors. Several companies, especially in the US, have recently committed to CCUS, potentially at scale, as part of their long-term operational emissions reduction. In our engagements, we have been asking for clearer disclosure on CCUS strategies and associated risks, while monitoring progress.

Also in this issue, Ross Teverson explains how EOS has evolved its credit engagement approach as the size of the sustainable bond market has grown. The flood of issuance over the last five years has attracted greater regulatory scrutiny of issuers’ sustainability strategies but also more awareness and acceptance of bondholder engagement.

Finally, as regulators in Japan and South Korea try to boost shareholder value by addressing some longstanding corporate governance issues, Haonan Wu assesses the progress that has been made over the last few years. He also identifies some of the changes we would still like to see, such as more effective independent directors who can challenge a company’s executive team.

To find out more, read the EOS Q1 Public Engagement Report.  

EOS Public Engagement Report Q1 2024

EOS Public Engagement Report Q1 2024

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