ESG resolution round-up: BNP Paribas AM supported less than quarter of Say on Climate votes this year

Climate proposal backed by Amundi, HSBC and Man Group garners 26% support at Japanese coal giant, as Schroders rules out support for living wage ask at Sainsbury’s.

BNP Paribas Asset Management supported less than a quarter of Say on Climate votes this year, a substantial drop from the 71 percent it gave corporate climate plans in 2021.  

The French asset manager revealed that of the 34 Say on Climate votes put to investors this year it supported just 24 percent – a consequence of a new “analysis grid” introduced into its voting policy to assess the merits of companies’ plans.  

Factors considered include whether the companies have set short and medium-term 2050 net-zero targets that align with global efforts to limit warming to 1.5C. 

Last year, Say on Climate votes achieved near-unanimous acceptance from shareholders. Research by proxy solicitation company Georgeson, for instance, put average support in 2021 at 97 percent.     

Since the launch of the Say on Climate initiative – the brainchild of Sir Chris Hohn and his UK hedge fund The Children’s Investment Fund (TCI) – concerns have been raised that the vote could become an “ineffective compliance mechanism”, akin to the Say on Pay vote in the US, leading to the rubber-stamping of inadequate plans.  

But Responsible Investor reported last month that there were signs that investors were becoming far less supportive and more discerning when it came to corporate transition plans. 

Say on Climate votes put forward this year by financial giants UBS, Barclays and Standard Chartered saw significant pushback, with investor opposition of 22 percent, 19 percent and 17 percent, respectively.   

Correction: the proposal at Credit Suisse that went to the vote in April was not a Say on Climate vote as RI reported yesterday but a climate proposal filed by ShareAction, which received 19 percent support.

Last month, Woodside suffered the largest shareholder rebellion against a Say on Climate vote, with just under half of investors (49 percent) rejecting the Australian oil and gas giant’s climate plan.  

That tally surpassed the previous record set on 3 May at rival Santos, where 37 percent of shareholders rejected the oil major’s strategy. 

European heavyweights win support for pioneering climate proposal at Japanese coal utility 

Just over a quarter of shareholders (26 percent) backed a climate proposal at J-Power, urging the Japanese coal-powered utility to set a business plan and Paris-aligned short and medium-term emissions reduction targets.  

That proposal was one of three filed at the company by European investment giants Amundi, Man Group and the asset management arm of HSBC. 

The trio, which represent $3 trillion in assets under management, collaborated on the resolutions with influential Aussie-based non-profit the Australasian Centre for Corporate Responsibility, a seasoned and prolific filer of ESG shareholder proposals.  

It is the first time that institutional investors have filed climate proposals in Japan, and the 26 percent tally was described by its backers as a “significant moment in Japanese investor relations”. 

Two other proposals – one on aligning future capex with Paris targets and another on remuneration and climate goals – achieved lower support of 18 percent and 19 percent respectively.  

Sachi Suzuki, senior stewardship specialist at HSBC Asset Management, said he hoped the result would encourage “a shift from the current high-cost, coal-based strategy to a more credible decarbonisation strategy, including increased renewable investment in line with investor expectations”.   

UK fund manager Schroders rejects living wage proposal at Sainsbury’s 

Schroders has revealed that it will oppose the living wage shareholder proposal filed at UK supermarket giant Sainsbury’s on 7 July.  

The resolution, led by non-profit ShareAction, calls on the UK’s second-largest grocer to gain accreditation from the Living Wage Foundation, a charity that calculates an annual “real living wage”, by 2023.  

Investors that have already thrown their weight behind the proposal include Legal & General Investment Management, HSBC Asset Management and UK pension scheme NEST.

But in a blog published yesterday, Schroders’ head of active ownership, Kimberley Lewis, wrote that “after a detailed analysis of likely outcomes”, the UK fund manager believes the resolution “fails to fully consider both the business implications and potential wider stakeholder impacts”. 

Schroders, a top five shareholder in Sainsbury’s, is itself Living Wage accredited and a member of the Good Work Coalition, a group of investors convened by ShareAction to engage companies on issues such as pay. 

Lewis stated in her blog that Schroders’ view is that Sainsbury’s is well-run and “a leader within the sector for sustainability”. 

She also highlighted the fact that no UK supermarket is accredited by the Living Wage Foundation currently. 

In April, Sainsbury’s announced that it would raise pay for employees in its outer London stores to £11.05 per hour, meaning all direct employees would be paid at current Living Wage rates. That commitment did not cover workers on its sites employed via third-party contractors, such as security guards and cleaners.

On this increase, Lewis wrote: “With these new wages, Sainsbury’s already meets the expectations of our engagement blueprint to pay a fair living wage, and goes beyond them when taking into consideration other benefits such as employee pensions and store discounts.”

Last week in RI, ShareAction’s CEO, Catherine Howarth, put out a call for support for the Sainsbury’s proposal. “Investors have played a decisive role in promoting Living Wage standards across the UK’s listed sector over the last decade,” she wrote. “This always made sense – but now in an inflationary environment that imposes extreme pressure on low-income families, holding firm in support of Living Wages looks set to become a far more significant, visible mark of investor responsibility.” 

Responding to Schroders’ position on the vote at Sainsbury’s, UK charity Friends Provident Foundation wrote on Twitter that it regrets that one of its asset managers is “undermining its ESG credibility like this”. 

“Schroders has adopted Sainsbury’s disinfo that becoming Living Wage accredited would ‘effectively mean a 3rd party would decide employee pay changes each year’. Over half the FTSE100 is accredited, including @Schroders, does @LivingWageUK decide their pay every year? No,” it added.