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Supporting climate action and board diversity

ESG/SRI, Responsible Investing

BNP Paribas Asset Management
 

As the 2021 season of annual general shareholder meetings draws to a close, we take stock of how we voted on our holdings, in particular on issues around climate change and board diversity, our focus areas. 

As an active shareholder, we opposed 34% of resolutions, a rate that has been rising for several years and is up from 32% in 2020. That percentage was already 10 points above the rate in 2018.

Source: BNP Paribas Asset Management, July 2021

We opposed 911 resolutions at 150 companies relating to board elections, discharge, or approval of the accounts, for environmental or social reasons. The numbers compare with 451 resolutions at 66 companies in 2020 and accentuate our stewardship role.

We also focused our dissent on executive compensation issues, voting against 61% of the time, up from 59% in 2020.

Acting on corporate climate lobbying

On corporate climate lobbying, we continued to lead, encouraging companies to align their efforts with the goals of the Paris Agreement. We actively support those companies engaged in transitioning to a 1.5°C trajectory.

Exhibit 2: Backing climate-related shareholder resolutions

Source: BNP Paribas Asset Management, July 2021

We initiated the filing of resolutions with two companies, requesting detailed reports on how their direct and indirect lobbying activities (i.e. through professional associations) align with the goals of the Paris Agreement.

Our resolutions attracted record support at the meetings of Exxon Mobil and Delta Airlines* shareholders, gaining 64% and 63% approval respectively. This marks an historic turning point and paves the way for heightened global awareness among investors and companies.

Calling for better climate change reporting

We opposed 700 resolutions specifically for climate reasons.

These were cases where companies are not properly reporting on their carbon footprint or do not communicate or want to engage constructively on mitigating and adapting to climate change.

BNP Paribas Asset Management voted on a further 16 ‘say-on-climate’ resolutions proposed by companies. This is a new type of proposal to vote on a company’s climate action strategy.

“The growth in climate-related resolutions filed by shareholders showed that we’ve reached a major turning point in how companies are run, and should impact the agendas of AGMs for years to come”

Michael Herskovich, Global Head of Stewardship at BNPP AM

Applying pressure for more board diversity

Since 2020, we have required a minimum of 30% of board members to be women in Europe, North America, Australia and New Zealand. We have voted systematically against all male directors if the level is below 20%.

This year, we strengthened our board diversity requirements by setting a threshold of 15% for women board members at Asian and Latin American countries, while from 2025, we plan to apply a threshold of 40% globally.

Exhibit 3: Supporting board diversity

Source: BNP Paribas Asset Management, July 2021

For more on BNP Paribas Asset Management’s views on active stewardship as an essential part of its role as a ‘Future Maker’ and a sustainable asset manager for a changing world, read Sustainability – Investors must be stewards

*These companies are mentioned for illustrative purpose only. This is not intended as a solicitation of the purchase of such securities and does not constitute any investment advice or recommendation


 

This material is issued and has been prepared by a representative of BNP PARIBAS ASSET MANAGEMENT Australia Limited (“BNPP AMAU”) AFSL 223418 ABN 78 008 576 449.

This material is produced for information purposes only and does not constitute:

  1. an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
  2. investment advice.

Opinions included in this material constitute the judgement of BNPP AMAU at the time specified and may be subject to change without notice. BNPP AMAU is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the financial instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for an investor’s investment portfolio.

Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its/their investment objectives. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general mmarket conditions. The different strategies applied to the financial instruments may have a significant effect on the results portrayed in this material.

All information referred to in the present document is available on www.bnpparibas-am.com

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