Should large listed companies like Shell, Total or Rio Tinto aim for stricter targets for greenhouse gas emissions? Should they at least disclose their entire CO2 emissions? Should Amazon and Chevron check at which points in their economic activities there is a risk of human rights being violated?
With resolutions at annual general meetings, investors have the opportunity to push the business activities of companies to a more ecological and social approach.
On behalf of Fair Finance International, research company Profundo analysed and scored the voting behaviour of six large German investors on 43 shareholder resolutions proposed by investors during the AGMs of companies active in the fossil fuels, energy, banking, mining, agribusiness, food and manufacturing sectors worldwide. Did they use their voting rights in the interest of climate protection and human rights due diligence? Or did their votes counteract the goals of transforming the economy towards sustainability?
Of 43 ESG-related resolutions examined at the six German investors, 15 were related to social, human rights and other sustainability aspects, and 28 dealt with climate protection, of which at least three when tabled to a vote achieved a narrow majority. Although 40 resolutions failed to be voted in, the filing of this type of shareholder resolution remains a promising approach. It puts investor pressure on companies, with the ultimate goal of a more sustainable economy.
As voting results are publicly visible, major shareholders need to show their true colours. Their promises of mitigating climate change and respecting social standards must be reflected in their voting behaviour. Then again, supporting a shareholder resolution supporting sustainable goals at an AGM is an action that is easily implemented.
In scoring this German investor voting behaviour, Allianz scored 7.7 out of 10 points possible, closely followed by Deutsche Bank. The other financial institutions included in the Fair Finance Guide Germany, Axa, R+V and Alte Leipziger, scored between 5.6 and 6.6. For Deka, there were not enough voting results for an evaluation.
Investors should not let pass the opportunity to bring forward ESG resolutions. We call on institutional investors to also file resolutions themselves that bring climate protection, human rights and ecology to the table. Facing Finance - lead organisation in Fair Finance Germany - is calling on the German government, in line with Recommendation 31 of the Sustainable Finance Committee, to "create a reliable legal basis for collaborative ESG engagement" in order to give investors in Germany better opportunities to hold companies accountable regarding a social-ecological transformation of the economy.
Read the entire report here.