Engagement - voting
To motivate and stimulate change within companies included in the portfolios, the fund votes at the Annual General Shareholders’ meetings (AGM) of those companies. Voting advice is obtained from Pensions & Investments Research Consultants (PIRC) Services. Triodos SICAV I then applies its own voting guidelines and reviews each recommendation before voting. The fund has deviated from PIRC’s standard voting recommendations for 7% of all agenda items. In 2016, the fund voted at 109 shareholder meetings. The fund voted in line with company management on 59% of the agenda items. In 2016, the fund’s proxy voting guidelines were strengthened, particularly with regard to share repurchases. The fund remains critical towards board remuneration policies. Consequently, the fund voted against 79% of the resolutions related to remuneration.
The fund aims to inform companies in advance about how it intends to vote at their AGMs. Thirty-six companies replied to the feedback letter. The fund had contact with Liberty Global and WPP to discuss the fund’s concerns regarding those companies’ remuneration policies and practices. Smith & Nephew contacted the fund to seek feedback on its newly developed remuneration policy. This new policy will be put on the agenda of the AGM in 2017. Smith & Nephew is developing this new policy as a result of shareholder concerns raised at the 2016 AGM.
In 2016, the fund voted on 45 shareholder resolutions. It voted in favour of 29 of these resolutions. At the AGM of H&M alone, 15 shareholder resolutions were brought forward. The fund voted in favour of only five of these resolutions. Four of them related to equality and the fifth resolution concerned equal voting rights.
In 2016, the fund followed up on the letter sent to 110 investee companies in December 2015, in which it announced that for the 2016 AGMs the fund would focus on climate change. Twenty companies responded to our letter. Climate change will remain an important element of the fund’s engagement and dialogue with specific companies included in the portfolios. The fund also calls upon companies to publish their CO2 emissions, as that will allow the fund to monitor the total carbon footprint of its investment portfolios.
In 2017, attention will focus on board diversity. In co-operation with the fund, Nyenrode Business University has carried out research into the relationship between board diversity and company performance. In one of the studies, the direct relationships between gender diversity and ESG performance and gender diversity and financial performance were analysed. In both cases the relationship proved to be significant and positive. Another study found a positive relationship between age diversity and ESG performance. In 2015, the fund called upon companies to disclose and improve policies, programmes and targets with regard to gender equality. Feedback on this letter resulted in a number of insights. In 2015, many companies improved their board diversity and training and education have since been used to increase awareness of the importance of diversity. However, few companies set actual targets. In the letter sent to 104 investee companies in December 2016, the fund called upon companies to publicly disclose their policies, programmes and targets with regard to diversity within the organisation, to develop targets for board diversity and to publicly disclose evaluations of this policy and the actual achievements.