Making our voice heard

08-03-2011 | By voting at and attending Annual General Meetings (AGMs), we challenge the companies we invest in to constantly improve their sustainability performance. Proxy voting is a clear and efficient way to make our voice heard. In 2010, we voted on ballots for 100 company meetings.

Shareholder resolutions

Shareholders brought proposals to the agenda at five of the meetings in 2010. In each instance Triodos carefully assessed the resolutions, taking into account the standpoint of the proponents and of the company. In the end we almost always supported shareholder resolutions. For example, at the Walt Disney and Johnson & Johnson meetings, Triodos supported resolutions requesting a yearly ‘Say on Pay’ consultative vote allowing shareholders the opportunity to comment on executive remuneration. At Walt Disney, the resolution was a success, with 52% of shareholders voting in favour of the proposal. Unfortunately, at Johnson & Johnson the resolution failed by a narrow margin, with 52% of shareholders voting against it.

AGM attendance

As an active shareholder, Triodos attends AGMs to raise questions and encourage continuous improvement in sustainability performance. Since this form of engagement has proven successful, Triodos expanded its AGM activities in 2010, attending six AGMs in total: Reed Elsevier, Wolters Kluwer, BG Group, Henkel, Johnson Matthey and BT Group. Additionally, Triodos cooperated with other institutional investors to raise sustainability questions at two AGMs, those of Ahold and DSM. For the DSM and Reed Elsevier AGMs, we also had the opportunity to respond to draft remuneration plans before the meetings.

What is proxy voting?

Proxy ballots are the most common form of voting at company AGMs. They usually concern proposals from company management on issues of corporate governance, such as strategy, auditing, board composition and executive compensation. As mentioned above, shareholders can also make proposals which are voted on at AGMs. Triodos uses proxy voting to influence company behaviour, aiming to improve environmental, social and governance performance.

Triodos voting

In 2010, Triodos continued voting at meetings for the Triodos Sustainable Equity Fund and Triodos Sustainable Mixed Fund, and began voting at meetings for companies in the Triodos Sustainable Pioneer Fund. Triodos supported 69% of proxy voting resolutions, withheld its vote for 15% and opposed 16%. Most of the resolutions we did not support were related to remuneration and involved excessive compensation packages and a lack of transparency regarding remuneration policies. This form of shareholder engagement is seeing results; many companies have improved their remuneration systems and some have even included sustainability targets as incentives.

AGMs and proxy voting, looking forward

All in all 2010 was an interesting year for our proxy voting and AGM activities. What is the outlook for 2011? Of course we will continue to vote at all meetings and attend as many as possible. However, we also want to broaden our impact and plan to discuss our voting policies with a number of companies in advance of the shareholder meetings with a view to initiating deeper discussion on remuneration policies and other sustainability issues.     

More information on engagement and our latest Triodos Sustainability Research Engagement Report .

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.