In the energy sector, ESG investors often focus on the “E” (environment); largely sidestep the “S” (social), and completely ignore the “G” (governance). In many cases, green trumps, or even obscures, murkiness. Iberdrola SA, the European utility that’s a champion in renewables, is a case in point.
The company, one of the world’s largest wind power generators, is embroiled in a murky case of alleged corporate espionage that’s now an official criminal investigation in Spain. Its chairman and chief executive officer, Ignacio Galan, will appear in court alongside other top executives on Jan. 18 as suspects, which in Spanish law refers to unindicted subjects of official probes. The probe is part of a broad scandal involving other blue-chip Spanish companies. According to investigators, several companies — including Iberdrola — allegedly hired a firm owned by a former senior police officer to spy on rivals and their executives.
The events under investigation date back to 2004 and include a couple of colorful corporate battles. According to court documents, Iberdrola allegedly asked the former policeman turned private investigator to dig up information on the chairman of a local competitor. It also allegedly asked for intelligence on a local tycoon Florentino Perez (better known as the chairman of the Real Madrid soccer club) and his family amid a takeover fight, according to the filing.
The investigation is still in preliminary stages. Iberdrola strongly denies the charges, arguing that hiring the former cop was part of normal business and all payments were for proper services.
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