Union Investment, the Frankfurt-based asset manager with €197bn in assets, says it voted at 836 annual general meetings (AGMs) of investee companies in 21 countries during 2012 – more than three times as much as in the previous year.
According to its engagement report for 2012, Union voted most often at AGMs in the US, followed by those in Japan, Germany, the UK and France. The voting at the 163 AGMs in Japan marked Union’s first engagement in that country. Union also cast votes for the first time at AGMs in Norway, Denmark, Ireland and Luxembourg.
The asset manager voted most often (43.5% of total) on management appointees. Executive compensation was the second most important issue (8.5%) for Union, followed by capital measures (7.7%), the hiring of the accountant (6.2%), supervisory board appointees (3.7%) and board discharge (2.3%).
The share of “other issues,” including environmental and social ones, accounted for 17.3% of Union’s total votes.
In addition, Union said its portfolio managers had held more than 4,000 discussions with investee companies on ESG issues during 2012 – with the “G” as the predominant theme.Prior to 2011, Union, a signatory to the Principles for Responsible Investment (PRI), had been known in Germany for its engagement on behalf of retail fund clients. Then in July of that year, it began offering proxy voting and engagement services for institutional investors. Its first two clients were the Bank für Kirche und Diakonie (KD-Bank) and the KZVK Rheinland-Westfalen, a pension fund for church employees. KD-Bank was in the news last November, when it said that membership in the PRI was not worth the fee.
As to the efficacy of its engagement, Union said it had made progress at four listed German firms, including car companies Daimler and BMW, energy giant RWE and technology firm Siemens.
Due in part to the fund manager’s efforts, Daimler is investing up to €5bn to lower the carbon emissions of its cars, while BMW is investing heavily in hybrid and electric car technology. RWE, meanwhile, has given up plans to build nuclear reactors in eastern Europe and, together with peer E.ON, in the UK. Finally, Union said its efforts helped persuade Siemens to sell its weapons division, quit a venture with French nuclear firm Areva and investment billions of euros in renewable technologies. Link