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Stewardship in 2022 – Gender diversity and environmental considerations


In this article:

    Stewardship and engagement are at the heart of our sustainability strategy and we regard the annual season of shareholder meetings as an important time to make our voice heard in support of the energy transition, environmental sustainability and equality & inclusive growth.  

    This year, we are reinforcing our focus on gender diversity [1] and environmental considerations (climate change and biodiversity) as we actively vote the positions we hold on behalf of clients in an effort to influence the behaviour and strategy of companies and other issuers, to make a difference and have an impact.

    We believe that we must use the mandate that as asset owners, our clients have given to us to promote best governance practices and act as a responsible investor. This includes opposing management resolutions when we believe they are not aligned with good governance or when they do not meet our high expectations of what constitutes responsible business conduct.

    Don’t be shy – Vote against

    Our ambitious voting policy aims to bring about real change. This includes strengthened requirements on action in favour of the climate and diversity.

    For example, we want at least 30% women on boards of directors in Europe and North America. If this is not met, we will vote against the appointment of any male directors.

    We should note that company size, country of incorporation and local regulations significantly affect the levels of female board membership. These are key factors for investors to consider when assessing this aspect of good governance.

    We believe a more diverse board will have more meaningful and constructive debates and raise more issues with management. Ultimately, this should lead to improved company performance. Indeed, numerous studies have shown that companies with good environmental, social and governance (ESG) practices do well over the long term. [2]

    Unlike our peers, we abstained and voted against in about one third of the cases at shareholder meetings in 2021 (see exhibit 1), whereas the industry’s ‘opposition rate’ was around 10%. Beyond board director elections and diversity, another key area has been executive compensation where we opposed on average 60% of the proposals.

    Beyond voting, we engage in dialogue with companies, sovereigns and public authorities to improve their ESG practices.

    Here, we note that we are seeing more and more collective action. A good example is Climate Action 100+, an initiative of which we are a member. It brings together investors representing USD 60 trillion in assets who want to use their influence to ensure that the companies that emit the most greenhouse gases worldwide take the necessary measures to combat climate change.

    What is new in ’22?

    Each year, we review our governance & voting policy to adapt it to the current ESG practices and challenges. We see 2022 as a turning point in terms of ESG integration through this policy since we are now incorporating ESG considerations in our voting decisions based around these themes: 

    • Reinforcement on climate-related expectations
    • Biodiversity-related expectations
    • Companies with low ESG scores. 

    When companies do not meet our expectations, we oppose management resolutions on: 

    • Board elections
    • Discharge of board and management
    • Financial statements. 

    On climate, we will oppose resolutions if the company is among the world’s largest emitters of greenhouse gases (GHG) and has not yet adopted a ‘net zero by 2050’ ambition. This expectation comes on top of our requirement for proper reporting on the company’s carbon footprint and for a strategy on climate adaptation and ensure climate lobbying is aligned with Paris agreement.

    On biodiversity, and reflecting on our Biodiversity Roadmap, we expect companies to assess and report on key impacts and dependencies on nature, beginning with companies in high impact sectors, and with a focus on deforestation and water-related issues.

    We are also seeing more and more ‘Say on Climate’ proposals. Companies submit these resolutions to give shareholders the possibility to vote on climate policy.

    When voting on these proposals, we will consider whether the company has disclosed and set targets on all relevant GHG emissions, seeks to achieve net-zero emissions by 2050 or sooner, and has reported on climate-related governance, its strategy, risk management and the metrics used.

    Finally, we have been advocating for the inclusion of ESG criteria in executive pay through our engagement. We will now oppose packages when the company has not included ESG performance criteria in any form of remuneration for executives.

    To sum up, in 2022 we are reaffirming our commitment to ‘walking the talk’, to building on our impressive voting record and to raising the bar further for sustainable investing.

    Also watch this video with Michael Herskovich, global head of stewardship

    Sustainable investor – BNP Paribas AM – Michael Herskovich


    [1] BNP Paribas Asset Management conducted a global study of the number of women on boards ahead of the 2022 AGM voting season. It compares the 3 500 companies in which we invest with the 17 000 listed companies in the Institutional Shareholder Services (ISS) database. More at  

    [2] See, for example, ‘Diversity wins. How inclusion matters’, McKinsey & Co, May 2020


    Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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