BVK, the CHF39.5bn (€39.9bn) Swiss pension fund for the employees of the canton of Zurich, has decided to expand from this year the voting rights policy in its global equity and emerging market equity portfolios, it said in its latest sustainability report.
In global equities, the scheme will raise its voice at annual general meetings (AGMs) of the largest 500 companies it owns, instead of the largest 300 companies, and companies from emerging market countries will also be covered by the new voting rights policy, BVK added in the report.
The scheme covers 56.9% of its equity holdings through the voting rights policy, planning to achieve net-zero emissions in its equity and corporate bond portfolios by 2050, it added.
BVK invests CHF13.8bn, or 35% of its total assets, in global equities, including 11% in Switzerland, 72% in developed countries, and 17% in emerging markets, according to the report.
Additionally, CHF3.1bn, or 8% of BVK’s total assets, are invested in corporate bonds, 36% in high-yield debt, and 64% in high-grade bonds.
As a goal, asset managers mandated by BVK have to keep the volume-weighted CO2 intensity (WACI) in its portfolio to 20%, below that of its respective benchmark index.
Last year BVK established a working group to start reporting on ESG investing in government bonds, it added.
Engaging on climate and remunerations
BVK’s voting rights policy deals, among other issues, with the proportionality of manager remuneration, and questions relating to corporate governance. Excessive manager remuneration was the most common reason why BVK rejected board of directors’ proposals in the past AGM season.
Of its owned companies, 12 submitted plans to change their business model to try to minimise the impact on climate, with BVK approving 50% of the plans submitted, it said.
Of the 97 climate proposals submitted by shareholders, 82 (85%) received the support of the scheme, it added.
The Swiss pension fund opposed the re-election of chief executive officer and chair of the board Darren Woods, and of two other members of management at ExxonMobil, rejecting anti-climate motions, according to BVK.
The scheme supports initiatives such as Climate Action 100+ with its own resources, holding discussions with “the two largest CO2 emitters” listed on the blue chip Swiss Market Index (SMI), Holcim and Nestlé, it said.
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