Shareholder push to protect planet reaches next level

Investors have been busy taking the companies in which they invest to task in 2021. The number of successful shareholder proposals pushing for change on environmental, social and governance issues is already 62% higher than in all of 2020 – according to a Sustainable Investments Institute review of US companies.

We’re pleased to say that we’ve been front and centre of this fight for a better world. Key calls for change we were involved in include:

• demanding greater openness on efforts to achieve more diversity at American Express, United Parcel Service and Caterpillar
• replacing board members with people who have more experience in dealing with climate-related issues at Exxon Mobil
• ensuring Chevron and General Electric reduce their carbon emissions and set ‘Net Zero’ targets – which means not only ceasing to emit carbon into the atmosphere, but taking measures to reduce what’s already there too

Such ‘shareholder resolutions’, as they’re known, become binding when the majority of the company’s shareholders vote in favour of them.

A bumper year and likely to continue

Leslie Gent, Head of Responsible Investing at Coutts, said: “2021 is really the first year we’re seeing shareholder resolutions on environmental, social and governance issues passing regularly – investors are increasingly recognising the role they can play in changing companies’ behaviour and are using their voices more frequently than ever before – and it’s getting results.”

She added: “It’s a trend that we expect to continue, with investors demanding that companies think about the role they play in safeguarding our planet and society.”

It's not just climate change

While climate change is clearly a big issue for investors, we’re increasingly seeing shareholder resolutions around social issues too, mostly around diversity and inclusion, as well as transparency within supply chains.

Investing on our clients’ behalf, we show our commitment to greater diversity at companies by backing resolutions that call for them to address the lack of representation. We also vote against the re-election of directors where we believe there is a greater need for diversity.

For example, at Amazon’s Annual General Meeting we voted for more transparency on how they’re trying to improve diversity, and we voted against the election of four directors to support this. We did something similar at IBM as well.

Leslie said: “Research shows time and time again that diversity can lead to meaningful financial benefits for a firm, its investors and employees. It’s important that we see this at all levels of a company, but especially at the board and senior executive level.”

Our latest voting and engagement activity

We do our own voting and engagement with companies in partnership with EOS at Federated Hermes, which works with asset managers on behalf of investors to provide stewardship services.

In the three months to the end of June, we:

• voted at 844 meetings (12,601 resolutions).
• opposed one or more resolutions at 634 meetings, showing how we’re willing to go against management when we feel it’s necessary
• engaged with 346 companies held in our client portfolios and funds on 986 environmental, social and governance issues.

The full rundown of our most recent activity topic-by-topic is in the charts below.

Read more about responsible investing at coutts

When investing, the value of your investments, and the income you receive from them, can go down as well as up and you may not get back as much as you invested.

Our VOTING AND ENGAGEMENT IN NUMBERS, Q2 2021