Ethos, the Swiss foundation for sustainable development. is to recommend shareholders to vote for climate strategies and companies’ reports on sustainability if detailed, important and verified information is disclosed, as it tightens guidelines on proxy voting at annual general meetings (AGMs) for 2022.
According to the new chapter 2 of the guidelines, companies need to disclose quantitative indicators and all material topics with targets verified by an independent third party in sustainability reports.
Companies will also have to quantify “ambitious” social and environmental targets in their reports, published “early enough” prior to AGMs, it said.
Ethos will recommend shareholders to oppose companies’ climate transition plans if a firm avoids publishing intermediary reduction targets for CO2 emissions, or if it has not set targets to reduce its CO2 emissions which are compatible with a maximum 1.5°C, or if it does not publish an annual report on the implementation of its strategy, according to guidelines.
Ethos expects companies to publish CO2 emissions in accordance with the GHG Protocol and their reports to cover at least 90% of indirect emissions linked to the life cycle of products. Ethos has also reviewed its guidelines for proxy voting at AGMs in 2022 to adapt them to new legislation and best practices.
The counter-proposal to the popular initiative “For responsible business - protecting human rights and environment” requires companies of a certain size and listed companies to submit sustainability reports to a shareholders’ vote.
This obligation should come into force on 1 January 2022, but it will apply from fiscal year 2023 and at AGMs from 2024.
The rule, Ethos said, does not include details on the content or quality of the information that companies need to submit to shareholders, therefore it added chapter 2 in the guidelines on voting on sustainability reports, climate strategies, or transition action plans, and climate reports.
Ethos will introduce its own criteria for the approval of sustainability reports as soon as 2022. Companies are informed and can take the criteria into account in preparing their sustainability reports, it added.
Ethos’ board of trustees has also approved new guidelines for the re-election of companies’ board members. It will recommend shareholders oppose the re-election of the chair of the nomination committees or the chair of the board of directors if the board has less than 20% of women as members “without adequate justification”, according to guidelines.
The threshold is raised to 30% from 2026.
The new provisions for the Swiss Code of Obligations, in force since January, require companies based in Switzerland to respect a gender quota of at least 30% for boards of directors by 2026 and of 20% for executive management by 2031.
Ethos will also recommend opposing the re-election of a chair of a sustainability committee, or of a board, at companies with high CO2 emissions that have not implemented an adequate climate strategy.
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