ESG fights to watch this year’s AGM season

PepsiCo, Amazon and Citigroup have been named to visit the world’s shortlisted companies during this year’s annual meeting season, as businesses demand business action on a wide range of jobs, ranging from climate change.

Share-Action, the responsible investment charity, said the “13 important ESG resolutions” of 2021 included a proposal urging General Motors to publish its lobbying around climate change, a proposal calling on the Walt Disney Board to strengthen oversight of staff balance. Including ethnic and gender pay equity and a vote on Amazon’s biodiversity.

The list comes at a time of scrutiny about how asset managers voted at annual meetings, with widespread concern that large investors often promote their ESG certificates but fail to pass resolutions on issues such as climate change.

“Shareholder voting works. Decisions can provide everything from darbanization goals to healthy eating strategies, ”said Guy Opperman, UK Minister for Pensions and Financial Inclusion.

Despite warnings to many large investors that problems such as climate change pose a huge financial risk, several ESG proposals are passed each year.

According to ShareAction Voting matters According to the report, only 15 of the ESG resolutions in 2020 received the majority support in 2020. Blackrock and Vanguard, the world’s largest asset managers, supported 12 percent and 14 percent of the proposals, respectively.

The group, however, argued that its listing resolutions for 2021 were “high-quality, high-impact proposals” and called on property owners and asset managers to back those proposals. The list includes recommendations on climate change from Barclays, the Bank of the United Kingdom, healthy eating at supermarket group Tesco, and fast-food chain Wendy International’s human rights recommendations.

Citi said it was “perfectly focused on racial inequality, especially the wealth gap it creates.”

Barclays, which has already received a shareholder vote on climate change, said it had set a net-zero goal and provided details of its plans to achieve it in November. “We continue to discuss our ambitions and progress with our investors.”

Tesco said it did not believe the shareholder resolution was necessary, arguing that it had established an “ambitious commitment to health” rather than a proposal made at its annual meeting.

General Motors said it “believes climate change is real and we are in favor of climate action.”

Share Action reported that the amount of proposals from shareholders worldwide, which numbered more than 2,000 last year, meant that some pension funds and other asset owners struggled to identify which resolution should be a priority to discuss with their asset managers and firms.

It called on property owners to vote in favor of their managers’ list resolutions, to announce their voting intentions before the meeting, and to argue for any deviations from the voting results.

Isobel Mitchell, senior research and engagement officer at Share Action, said: “Many times big asset managers try to dismiss criticism about their poor voting record by making unsupported claims about the quality of shareholders’ proposals,” said Iswell Mitchell, senior research and engagement officer at Share Action. “This list removes the excuse.

“We hope that this will give property owners the confidence to keep their managers accountable, highlighting effective resolutions that are clearly worthy of support.”

Opperman added: “Trustee of the pension fund, you have the power – ask your fund manager to support the shareholder resolution or switch to a fund manager who lets you set your own policy. Let’s make 2021 the year of leadership and move towards positive change.”

Colin Baines, director of investment engagement at the Friends Provident Foundation, says there is growing focus on how asset owners vote on ESG resolutions as a proxy for how meaningful their ESG integration and engagement is.

He said many property owners wanted to introduce the assumption that their asset managers would vote in favor of the ESG resolution.

“For new entrants to the ESG market, it will be a test of how serious this AGM season is for most of the world’s largest asset managers, such as weak historic ESG voting records.

“Failure to support ESG resolutions would legitimately pave the way for greenwashing allegations,” Bains said.

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