As long-term stewards of our clients' assets, we aim to drive positive change on your behalf, through our thematic investment process, active engagement, and policy outreach.
Our stewardship diaries offer an insight into this work, sharing the tangible impacts of your investments. In this edition, we share recent actions on climate and supply chains, as well as key votes at Shell’s AGM.
Aligning banks to the Paris Agreement
Banks need to make public and credible commitments to aligning their finance flows with the goals of the Paris Agreement. We are pleased to be part of a new initiative which sets out investor expectations for banks. Investors are sending a clear message to banks globally that they must:
- Make credible and public commitments to aligning financial activities with the goals of the Paris Agreement
- Provide meaningful short- and medium-term targets for phasing out financing of carbon-intensive activities
- Report on progress
We have written to JP Morgan, Bank of Nova Scotia and HSBC to share these investor expectations.
To find out more about the investor initiative, please read the paper.
UK government responds to reviews on audit
The UK Government has launched an important consultation on proposals to reform audit – responding to recommendations from three key reviews, including the Brydon review, in which we participated on an Advisory Board:
While the BEIS proposals show willingness to act, we were concerned to see that the proposals also expose weaknesses in our capital maintenance regime today - the fact that directors may not know what their distributable reserves are.
We believe companies should know what capital they can safely distribute and that the BEIS Select Committee should take this issue up as an urgent matter of enforcement.
Key votes on climate
Following engagements with Royal Dutch Shell, Total, and BP’s boards on the need for Paris-aligned accounts, we have reviewed their 2020 financial statements and have set out how we voted at their AGMs. This is especially pertinent given the IEA’s recently published 2050 net-zero emissions scenario, which gives companies the external benchmark they need to ensure their reporting is Paris-aligned.
At Shell, we voted against the audit committee chair and financial statements, while abstaining on the reappointment of their auditor, EY.
At BP, we supported the financial statements and auditor, Deloitte. However, we abstained on the appointment of a new audit committee chair.
At Total, we voted against the financial statements, the board chair and CEO remuneration. There were no votes on the auditor or audit committee.
At all three AGMS, we supported the Follow This shareholder resolution seeking Paris alignment.
You can find out more about the rationale behind these votes on our website and also view the questions we asked.
Engagement with AB Foods
As signatories to the ICCR’s Investor Statement on Coronavirus Response, we have been engaging with companies on their actions towards their employees, suppliers, customers, and communities during the crisis.
The Bangladesh Accord requires that retailers and global brands maintain safe conditions at garment factories in Bangladesh. Set up in 2013 after the tragic fire at Rana Plaza, the agreement officially comes to an end this year, unless key stakeholders commit to its continuance. This would be detrimental to the safety of Bangladeshi garment workers, particularly at a time of great strain in the industry due to the pandemic. We have recently asked AB Foods, which owns Primark, to confirm whether it will be supporting the renewal of the Accord, and to outline what steps it is taking to protect workers in its supply chain.
We will be discussing the Accord, and other supply chain issues with AB Foods this month.
You can keep up to date with our stewardship activities by following us on Twitter and Linkedin, and by visiting the stewardship section of our website.
If you are a private investor, you should not act or rely on this document but should contact your professional adviser.
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