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.
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.
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.
If you are a private investor, you should not act or rely on this document but should contact your professional adviser.
This promotion has been approved by Sarasin & Partners LLP of Juxon House, 100 St Paul’s Churchyard, London, EC4M 8BU, a limited liability partnership registered in England & Wales with registered number OC329859 which is authorised and regulated by the Financial Conduct Authority with firm reference number 47511.
The value of the investments of the funds and the income from them can fall as well as rise and investors may not get back the amount originally invested.
All details in this document are provided for marketing and information purposes only and should not be misinterpreted as investment advice or taxation advice. This document is not an offer or recommendation to buy or sell shares in the fund. You should not act or rely on this document but should seek independent advice and verification in relation to its contents. Neither Sarasin & Partners LLP nor any other member of the Bank J. Safra Sarasin group accepts any liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this document or any part of its contents. The views expressed in this document are those of Sarasin & Partners LLP and these are subject to change without notice.
Where the data in this document comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third party data is provided without any warranties of any kind. Sarasin & Partners LLP shall have no liability in connection with third party data.
© 2021 Sarasin & Partners LLP – all rights reserved. This document can only be distributed or reproduced with permission from Sarasin & Partners LLP. Please contact [email protected].