The RLAM Responsible Investment team oversees voting activity across all of RLAM’s equity funds. The proxy voting season means that voting activity is usually concentrated during the first half of each year.
As shareholders in companies around the world, we hold voting rights that allow us to decide on various issues at company annual general meetings (AGMs), and for RLAM this is an important tool we utilise in our wider stewardship strategy. Since the start of 2022 and into the AGM proxy season, we have seen companies focus heavily on navigating past Covid-19 and into a post-pandemic world, with some businesses returning to executive pay packages not seen since before the lockdowns and furlough schemes of 2020. While a sense of normality has started to creep back into most of our daily lives, as responsible investors we need to keep our focus on encouraging companies to make better decisions, particularly in the face of the challenges we see today, and our voting activity throughout the year helps achieve us this.
ESG remains a big issue in boardrooms and over the course of this year, RLAM has voted at nearly 3,000 company meetings on resolutions including executive compensation, board diversity and climate change. Though Covid-19 concerns have partially subsided, environmental and social issues remain a pressing feature on meeting agendas.
Companies play an increasing role in achieving net zero by 2050 and this year RLAM voted on 30 climate resolutions put forward to meet this goal – also referred to as ‘Say on Climate’ proposals. However, there is an increasing amount of scrutiny around this area and on specifically how shareholders vote. Earlier this year we didn’t give our full support to BP and Shell’s climate transition plans. This was based on the team’s view that there was an insufficient alignment with the Paris Agreement goals and due to gaps we identified in their reporting. As part of our upgraded Net Zero engagement strategy we intend to continue engaging with companies on improving their practices.
Social matters have taken this year’s proxy season by storm with more than a third of all shareholder proposals voted by RLAM related to such issues. We supported over 20 shareholder resolutions requesting enhanced disclosures and audits into Diversity & Inclusion – particularly on companies that failed to showcase their efforts.
On a broader scale, we heightened our concerns over companies, and board directors, with material business links and operations in Russia since the onset of the war in Ukraine. With the global inflationary trends as a knock-on impact that has spurred on industrial strike action across the UK, as well as the lurking cost of living crisis, devasting wildfires and high temperatures around the world, there is a strong case that environmental, social and governance issues will continue to dominate voting agendas for the months and years ahead.
You can learn more about our approach to voting by accessing our UK and Global proxy voting policies, available in the Responsible Investment section of our website, while a full record of our voting history can be viewed on our voting database.
Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.