CofE to vote against VW leadership over refusal to table climate lobbying resolution

The Church of England Pension Board (CEPB), which manages more than £3 billion ($3.93 billion; €3.62 billion) on behalf of members, has told Responsible Investor it will vote against Volkswagen’s management and supervisory board in response to the German car manufacturer’s refusal to table the climate lobbying proposal it put forward with other big European investors.  

Last week, the seven-strong group of investors behind the resolution – which included Swedish pension funds AP7, AP2, AP3, and AP4, and asset manager Schroders – revealed that VW had blocked their effort on the basis that the topic was beyond the competence of shareholders to vote upon. 

The rebuffed proposal, if passed, would have required the car manufacturer to amend its articles of association to ensure that future sustainability reporting included an assessment of how its lobbying, including through trade bodies, impacts and aligns with its climate goals. VW committed to becoming net zero by 2050 “at the latest” last April.  

Charlotta Dawidowski Sydstrand, sustainability strategist at AP7, which co-led the filing of the proposal with CEPB, said at the time that it “speaks volumes that they have rejected the amendment on the basis of saying the board knows best, yet the board is still failing to deliver transparent oversight of the company’s climate lobbying.” 

A spokesperson for CEPB has now told RI that the fund “will be pre-declaring our vote against the management and supervisory boards, on the basis of shareholder distrust: that by not being transparent on the alignment of VW’s climate lobbying with the Paris goals, they are acting in the interests of the company rather than shareholders’ interests”. 

Sydstrand told RI that the decision by the company to block the proposal points to a wider issue of shareholder rights in Germany. “The consequence of the legal interpretation of VW’s lawyers is that shareholders are ultimately not able to influence change by filing shareholder proposals at all,” she said. Sydstrand added that AP7 will certainly send a signal to the company at its annual general meeting through its voting. 

This is not the first time that VW has rejected a climate lobbying proposal on these grounds. In 2019, Sydstrand told RI that VW was one of five German companies that had blocked resolutions on the topic using the same legal argument. 

AP7 and CEPB, along with BNP Paribas Asset Management, have collaborated on the issue of climate lobbying at European firms for several years. Last month, the trio launched the Global Standard on Responsible Climate Lobbying, a 14-point framework designed to ensure companies’ lobbying and political engagement activities are in line with the goal of restricting global temperature rise to 1.5C above pre-industrial levels.   

The investors behind the VW proposal argued that the company is lagging behind peers, including Mercedes-Benz and BMW, both of which have recently committed to include a review of climate lobbying policies and positions in their annual disclosures. 

A spokesperson for AP4 told RI that the decision by VW is “very unfortunate”. They added that the fund will “definitely make this clear by voting on the AGM and we are currently cooperating on the matter with other investors backing the proposal”. 

AP3 has “not made any decision to vote against any of the directors”, according to their spokesperson.

Schroders declined to comment.  

VW had not responded to a request for comment at the time of writing.