ESG fights to watch this year’s AGM season
PepsiCo, Amazon and Citigroup have been nominated along with a small group of companies from around the world to watch this year’s meeting season, as investors demand issues starting from climate change and finding employment for a wide range of employees.
ShareAction, a charity for responsible investment, said the 2021 “Top 13 ESG Resolutions” included a proposal to inform General Motors of its climate change lobby, a resolution to strengthen Walt Disney’s management overseeing employee equality issues. such as racial and gender pay equity and a vote on Amazon’s biodiversity.
He is looking at how active list managers vote at annual meetings, and is deeply concerned that large investors tend to claim their ESG credentials but do not support resolutions on issues such as climate change.
“Shareholder voting works. Resolutions can range from decarbonisation targets to strategies for healthy eating, ”said UK pension and financial inclusion minister Guy Opperman.
Although many large investors are aware that issues such as climate change pose significant financial risks, few ESG proposals are passed each year.
According to ShareAction Voting Issues report, of the 102 ESG resolutions it examined, only 15 had majority support in 2020. BlackRock and Vanguard, the world’s largest asset managers, supported 12 percent and 14 percent of the proposals, respectively.
But the group argued that the resolutions on its list for 2021 are “high-quality and influential proposals” and called on asset owners and asset managers to support the proposals. The list includes resolutions on climate change at Barclays, the UK bank, the healthy eating group Tesco supermarket group and human rights chain Wendy’s International, a fast food chain.
Citi said it was “focused on tackling racial inequalities, especially in terms of the wealth gap it creates.”
Barclays, which had a shareholder vote on climate change last year, said it has set a net zero target and gave details of plans to achieve that in November. “We continue to discuss our intentions and progress with our investors.”
Tesco said it did not believe the shareholders’ resolution was necessary, and argued that it had established “ambitious commitments to health” that go beyond what was proposed at the annual meeting.
General Motors said “we believe that climate change is real and that we are in favor of climate action.”
ShareAction said last year there were more than 2,000 volumes of shareholder proposals that made it difficult for some pension funds and other asset owners to identify which resolution should be prioritized to discuss with the asset manager and companies themselves.
He called on the owners of the assets to vote on the resolutions listed by their managers, to declare their intention to vote before the meeting, and to publish the reasoning for the deviations from the voting results.
“Often large asset managers have tried to dismiss criticism of their poor voting records by making unsubstantiated claims about the quality of shareholder proposals,” said Isobel Mitchell, ShareAction’s chief research and engagement manager. “This list removes that excuse.
“We hope it will give asset owners confidence to hold managers accountable, highlighting the impact of resolutions that clearly deserve support.”
Opperman added: “Pension fund trustees, you have the power. Ask your fund manager to switch to a fund manager that allows you to approve shareholder resolutions or implement your policy. Let’s make 2021 a year of care, and push for positive change.”
Colin Baines, investment commitment manager at the Friends Provident Foundation, said asset owners are “paying increasing attention to how asset managers vote on ESG resolutions, the extent of their ESG integration and commitment.”
Many asset owners said asset managers wanted to present a presumption to vote in favor of ESG resolutions.
“For many new entrants to the ESG market, including some of the largest asset managers with a low historical ESG vote, this season of AGM will be a test of how serious they are.
“Failure to pass the ESG resolution will legitimately pave the way for allegations of green cleaning,” Baines said.