Dutch pension funds and their asset managers want a separate vote on companies’ sustainability reports at annual general meetings (AGMs). They have set their hopes on Brussels to get their way.
Earlier this month, the director of the Dutch association for institutional investors Eumedion told the publication Investment Officer of his wish for such a vote.
Rients Abma talked of his “boundless frustration” that shareholders of Dutch listed companies have no say on their investee companies’ sustainability policies. They can only cast a vote on firms’ annual reports, but not specifically on sustainability reports.
As of next year, all companies will be required to publish such a report as a result of the Corporate Sustainability Reporting Directive (CSRD). But Dutch firms still do not need to allow a vote on this report, contrary to some other European countries including France and Switzerland.
Remuneration policy
The Dutch pension federation (Pensioenfederatie) as well as several pension asset managers told IPE they are supportive of a mandatory vote on companies’ sustainability reports.
“Information on sustainability has come to be just as important for investors as financial information,” a PGGM spokesperson said, adding: “In the Netherlands, shareholders are allowed a vote on the financial information in the annual report. We are of the opinion that something similar should be granted for information about sustainability. If not by binding vote, then at least by means of a non-binding one, comparable to the already existing vote on the remuneration policy.”
If shareholders do not agree with the sustainability policy of a company, it is now difficult for them to make this clear, noted the Pensioenfederatie.
“A possibility to vote against the sustainability report is a good way to voice such objections,” a spokesperson told IPE.
Frank Wagemans, specialist engagement and voting at Achmea Investment Management, said a company must, however, be made aware of the meaning of a vote against its sustainability report.
“As a matter of fact, a vote against a company’s sustainability report can mean two things: that the shareholder believes the company’s policy is not ambitious enough, or that it is too ambitious,” according to Wagemans.
As a result, it is “crucial” that clear legislation on the subject is drafted, preferably on the European level.
Pension asset manager MN, the asset manager of metals schemes PME and PMT, also prefers a Europe-wide approach. “We find it important to preserve a level playing field. In addition, of course the impact of legislation increases if it is implemented throughout Europe. If it were up to us, Brussels should make this work,” a MN spokesperson said.
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