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Voting season: making our voice heard as a shareholder

Voting season: making our voice heard as a shareholder

25-07-2019 | Visión
Sustainability issues have gained more traction in the US, while board composition remains among the most contentious issues in Asia. That was the outcome of the recent voting season at which Robeco uses its rights as a shareholder to try to make companies more sustainable. And there were some remarkable winners and sinners in the annual display of investor opinion, our Active Ownership team says.
  • Laura Bosch Ferreté
    Laura
    Bosch Ferreté
    Engagement analyst

The 2019 AGM season saw a marked increase in the number of shareholder meetings that Robeco voted at, due mainly to a rise in the number of clients and mandates. We voted at over 5,000 shareholder meetings in 2018, and we expect a hike in this number for 2019. As an asset manager, Robeco votes on behalf of asset owners with the aim of improving environmental, social, and governance (ESG) performance at the companies in which we invest.

“In the US, we’ve seen a huge increase in the number of social shareholder resolutions; last year the big theme was environmental, but this year the number of environment-related resolutions that made it to the meeting agenda has decreased, and the social ones have taken over,” says Engagement Analyst Laura Bosch Ferreté, who has collated all the results from our bustling March-June voting season. Social topics range from gender pay gaps to lobbying expenses.

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Co-filing resolutions

“About 35% of Robeco’s votes are in the US, making it an important market for us, and overall we supported about 75% of the social shareholder resolutions this year,” adds Carola van Lamoen, Head of Active Ownership.

“We co-filed two shareholder resolutions. The first asked Ford to disclose more on its climate-related lobbying contributions; we wanted to find out how much their contributions to trade associations and political groups was aligned with their business strategy on the environmental front, and whether the cost of it made sense.”

“The second asked BP to disclose to what extent its business strategy was aligned with the 2-degree climate change scenario, and how they are planning to reduce their greenhouse gas emissions to comply with that. Making sure that a company can remain in business in the long run, and identifies climate change as a major risk for their business, is a very important issue for shareholders.”

Link with engagement themes

“Several topics that were put forward by shareholders in shareholder proposals were in line with our engagement work. Examples are proposals about the gender pay gap, how pharma companies take drug pricing into account in their compensation practices, and a lot of focus on plastic pollution.”

The old chestnut of executive pay that does not reflect past performance reared its head again, along with new national regulations that will set targets for female representation on boards of directors from 2020. “We’ve seen the same patterns as in recent years; many votes against compensation packages due to structural issues in the way that companies design them,” she says. “We voted against 35% of executive remuneration packages in the US, which is slightly higher than our global average of 27%.”