Inside: Shareholder proposals face higher thresholds. Norway's central bank warns on climate risk. Climate change fine print is showing up in muni bonds. Trump moved to exit the Paris Accord while COP 25 moved to Madrid. Fracking banned in the U.K. The greenest place to work in America and the world's worst emissions gainers. — Emily Chasan 

Sustainable Finance

The U.S. Securities and Exchange Commission on Tuesday proposed changes that would rein in proxy advisory firms and make it easier for companies to block submissions from newer stockholders who don’t own many shares. The SEC's plan was heavily influenced by recommendations from the Business Roundtable, which claims the current shareholder proposal process is "out-of-date" even though it's recently pushed to have companies consider more stakeholder issues. The SEC also wants to give companies more time to review and respond to proxy adviser reports. The central issue is that proxy advisers help make it less awkward for institutional investors to vote against management, and management would prefer having more sway over investors who support them, writes Bloomberg Opinion's Matt Levine.

Investor groups said the change would make the shareholder proposal process even less democratic and make it tougher for small investors who submit a good number of proposals to do so. "The shareholder process is working and there is no need to fix it,” said Lisa Woll, CEO of US SIF. “Shareholder proposals are a vitally important, cost-effective and market-based mechanism for shareholders of all sizes to communicate with management teams, directors and other shareholders. If the legislation reduces proposals from small filers, big institutional investors may face more pressure to file proposals and ESG asset managers may have to find new ways to justify to clients that they are pushing companies to become more sustainable.

Investment banks are quietly sounding alarm bells about climate change — in muni bonds. Underwriters are disclosing more about the high exposure cities have to climbing temperatures and rising seas, writes Bloomberg's Danielle Moran. 

More money managers are setting up sustainability-focused mutual funds that mimic hedge fund tactics — not only buying stakes in companies favored by green investors, but also shorting firms that are too slow to make sustainable decisions. 

Norway's central bank sounded a warning on climate risk, saying that the country's banks have a series of risks related to oil exposure and should include climate change in their systemic risk analysis and ensuing capital requirements. 

In Brief

• Norway's biggest bank, DNB ASA, reorganized its markets unit to respond to "exploding interest" in  ESG.
• Shell is buying French offshore wind developer Eolfi and made an investment for an undisclosed sum in renewable power African microgrid company PowerGen. Tata plans 10,000 Indian microgrids.
• Canada Pension Plan Investment Board said it will pay $2.6 billion for wind and solar yieldco Pattern Energy Group.
• Morgan Stanley analyst Adam Jonas said the stock market is defining electric vehicle demand through the wrong metrics. 
• Walmart settled its lawsuit against Tesla over rooftop solar fires.
• More MBA students want sustainability programs.

Environment

U.S. President Donald Trump began the formal process of withdrawing the U.S. from the Paris climate accord — a move that will take until the day after the next U.S. presidential election to complete. Here's what a U.S. exit means for the climate change accord. 

The U.K. banned fracking just ahead of a general election amid concerns about earthquakes. U.K. fracking company stocks tumbled on the news with IGas Energy dropping as much as 41%, while Egdon Resources Plc sank 22%. The U.K. should make the ban permanent, Bloomberg Opinion's Leonid Bershidsky writes. 

Researchers in Sweden made a scientific breakthrough in energy storage, finding a way to store solar power for decades. Separately, in the Australian outback, power projects are working on ways to combine solar and wind generation with energy storage so that the lights stay on when the sun doesn't shine or wind doesn't blow. 

Climate scientists say Earth needs fewer people to beat the climate crisis. Policymakers around the world are already worried about how they can adapt to birthrates that are already falling. 

State and federal agencies have filed dozens of wildfire-related claims against California utility PG&E, seeking billions of dollars in compensation, in a state reeling from a week of wildfires and grid shutdowns aimed at preventing them. There's no easy way to end the state's blackouts. 

Chicago is the greenest place to work in the U.S. for the third year running, but cities likeSan Francisco and Atlanta are hot on its tail amid more new green buildings and energy efficient retrofits.

Madrid offered to replace Santiago as the new home for the COP 25 climate talks in December.

The renewable energy boom can't dim the outlook for coal in Southeast Asia. The International Energy Agency said the region's use of the fossil fuel could double by 2040.

Angela Merkel’s government and Germany’s carmakers agreed to increase cash incentives for electric cars. Merkel visited a Volkswagen factory this week to cheer on the company's push into electric vehicles, while facing growing criticism for failing to make more progress in reducing greenhouse gas emissions. 

These countries are making some of the world's worst emissions gains.

The world's oceans need a rescue plan, writes Bloomberg Opinion's Noah Smith. They suffer from the economists' classic "tragedy of the commons" that's led to overfishing, plastic pollution, chemical runoff, and acidification. 

Social 

More than 1,000 Google employees called on company management to ditch cloud deals with oil and gas companies and asked Chief Financial Officer Ruth Porat to release a company-wide climate plan that commits to cutting carbon emissions entirely. 

The vegan economy has arrived. Watch Bloomberg QuickTakes on the sector's growth. 

It's not that hard to give all new parents parental leave. Goldman Sachs now offers more parental leave in the U.S. than any of its biggest competitors, regardless of gender or caregiver status. UBS said it will begin offering 20 weeks leave to all parents in the U.S. starting in January.

Governance

New York prosecutors rested their securities fraud case against Exxon Mobil after nine days of trial testimony. The state struggled to provide hard evidence of an effort to mislead investors. Former CEO Rex Tillerson testified that the company's climate plan wasn't fake. 

India's financial sector regulator wants to link banker pay more closely to performance. 

Companies must give shareholders a clear explanation of the long-term threats they face from climate change and Brexit, the U.K.’s Financial Reporting Council said in an Oct. 30 letter to the heads of companies' audit committees. 

Note: Please send tips, suggestions and feedback to Emily Chasan at echasan1@bloomberg.net.

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