Proxy Voting Season Overview - ROBECO JANUARY - JUNE 2021
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ROBECO Proxy Voting Season Overview JANUARY – JUNE 2021
IN NUMBERS
5,598 Meetings voted
64,577 Proposals voted
% meetings
56% voted against
management
74 Countries where we
voted
Shareholder Meetings by Country and Region
UNITED KINGDOM ASIA EX-JAPAN
NORTH AMERICA
24% 3% 37%
EUROPE JAPAN
14% 9%
LATIN AMERICA MIDDLE EAST
& CARIBBEAN & AFRICA OCEANIA
10% 3% 0.4%
Voting Activity per topic
Audit/Financials
Board Related
Capital Management
Changes to Company Statutes
Compensation
M&A
Meeting Administration
Other
Shareholder proposals:
– Governance
– Social
– Environment
– Compensation
Totals
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
With management Against management
% Votes in favor of shareholder resolutions
83% Environmental
93% Social
74% Corporate
Governance
PROXY VOTING SEASON OVERVIEW | 2
INTRODUCTION
Contents The AGM season represents an important time for Robeco’s Active
Ownership team, as the majority of shareholder meetings take place
Introduction P3 in this period. This year’s voting season was particularly fascinating
because of the introduction of so-called ‘Say on Climate’ votes and
Climate concerns and the pandemic dominate voting season P4 the impact of Covid-19 on several aspects, like the adjustment to
We summarize how Covid-19 impacted the proxy voting season and virtual meetings but also the increased complexity of determining fair
how climate change once again took center stage. executive compensation in the light of the pandemic, like the receival
of state aid.
Board Composition P6
We endorse independent and diverse boards that promote long- Proxy voting is an important part of our sustainable investing
term shareholder value creation. approach, as it gives us a platform to voice our opinions and cast
vote on key topics such as board nominations, remuneration policies,
Executive Remuneration P8 shareholder proposals and capital management practices. Our
We use our proprietary remuneration framework to determine voting policy is designed after the widely recognized International
whether executive compensation plans are in shareholders’ best Corporate Governance Principles. In casting our votes, we assess
interest. whether internationally recognized corporate governance standards
are implemented, whilst accounting for local governance regulations.
Shareholder Proposals P10 Accountability and transparency are the cornerstones of good
We support sound shareholder resolutions that consider material governance and therefore core values of the Robeco voting policy.
ESG factors relevant for the company’s strategy.
And even though governance issues are often most central to an AGM,
Say on Climate P18 increasingly environmental and social topics find their way to the
This new type of resolution has the potential to greatly improve AGM agenda and into shareholder voting policies. This year, we saw
corporate accountability on climate change. climate considerations continue to grow in importance at shareholder
meetings, with climate proposals submitted either by shareholders or
Robeco’s Proxy Voting Approach P22 management with the introduction of ‘Say on Climate’ proposals that
Description of how voting rights are exercised by Robeco. focus on climate transition plans of companies.
Additionally, this year we co-filed a shareholder proposal at Amazon,
which requested reporting on Customer Due Diligence to determine
human rights violations. The proposal received support from over
one-third of votes cast, a clear signal from shareholders. In the first
half of 2021, we voted upon nearly 65,000 proposals at over 5,500
shareholder meetings across 74 countries. Through this report we are
pleased to share our key insights from the 2021 voting season.
Carola van Lamoen
Head of Sustainable Investing
PROXY VOTING SEASON OVERVIEW | 3
Climate and health crisis
dominate voting season
During the 2021 voting season, shareholders, regulators, and other stakeholders
had expanded expectations for board action in the wake of the pandemic. Boards
of directors were and continue to be prompted to address financial and social
pressures, a reimagined workplace, evolving regulatory demands and increased
scrutiny on environmental, social and governance (ESG) activities.
Boards under scrutiny in wake ‘Say on Climate’ votes on AGM agendas large numbers of at-risk or furloughed
of pandemic this year already, which we consider employees, have been expected to
Although the frequency and subject a proactive step for a number of disclose how the pandemic’s impact
matter of shareholder proposals vary companies. Even though this particular across their workforces was considered
significantly across markets, one new proposal gives investors the opportunity in reconfiguring pay for senior
climate-focused proposal gaining to take a clear stance on a company’s executives.
significant traction this proxy season climate response, it does not detract
is the request for a ‘Say on Climate’ from shareholders’ ability to escalate Lastly, many companies around the
advisory vote. Proposals requesting votes against responsible directors if world continued to hold virtual-only
a ‘Say on Climate’ vote demand that boards take insufficient action. meetings for at least the first half of
a company provide shareholders 2021. Last voting season, shareholders
with the opportunity to approve of On another note, expectations around expressed significant concerns
the company’s climate policies and board oversight of human capital regarding the inability to ask questions
strategies on a consultative basis, like management (HCM) and corporate or to vote at virtual meetings. Several
‘Say on Pay’ proposals do for executive culture have grown substantially. The solutions have been provided by some
remuneration. More specifically, this economic impact of the pandemic participants in the proxy voting chain to
new proposal requests that companies and social justice movements in many facilitate access to meetings. While the
annually report emissions data and regions have sparked demand for majority of companies made genuine
reduction strategies in a manner disclosure of more HCM data such efforts to provide shareholders with
consistent with the Task Force on as gender pay gaps, safety incidents the necessary platforms to participate
Climate-related Financial Disclosures’ and employee turnover. Moreover, virtually, some notable exceptions, such
(TCFD) framework. We saw a series of boards, especially at companies with as audio-only broadcasts, have set a
PROXY VOTING SEASON OVERVIEW | 4
VOTING SEASON UPDATE
to over 140 in 2020. Of the proposals made a Net Zero commitment, or
filed, many get withdrawn if the request ranks poorly in the Transition Pathway
is adopted by the company, but some Initiative’s Management Quality score,
proposals are also challenged by our policy dictates a vote against the
companies and omitted from the AGM. Chairman of the board due to climate-
Although these challenges are intended related concerns, if they are up for vote.
for poorly drafted or immaterial Benchmarks also enable investors to
proposals, companies lagging in climate monitor the annual progress made by
action often use this mechanism to skirt companies, and to determine whether
the concerns raised by shareholders. In to escalate their approach to voting and
these cases, shareholders may escalate engagement.
their climate-concerns by voting against
the nomination of board directors such These new guidelines for proxy voting
as the chairman or members of the underscore that, where companies
audit or sustainability committees. are failing to develop effective
climate transition plans, boards will
Holding directors accountable for a appropriately be held accountable.
company’s (inadequate) approach While institutional investors’ definitions
to climate change could become the of what is appropriate may vary, the
norm. Majority Action – an ESG focused importance and urgency of holding
shareholder activist group – published directors accountable is clear.
their ‘Proxy Voting for a 1.5°C World’
campaign, which outlines a list of
systemically important companies in
the three key industries that have not
set emissions targets aligned to limiting
warming to 1.5°C. The campaign calls
on institutional investors to use their
voting rights to vote against company
directors that have failed in their
poor precedent and may encourage oversight responsibilities to address
greater scrutiny still. escalating climate change.
A new frontier in the fight One of the challenges in adopting
against climate change such a voting approach is consistently
Climate change is now a cornerstone identifying which companies are not
of investor stewardship but addressing in line with a 1.5°C or Paris-aligned
this topic through votes at shareholder scenario. Companies and international
meetings is relatively novel. However, organizations often use different
the 2021 proxy voting season has methods to calculate their long-term
demonstrated that boards will be held 2050 climate change scenarios, which
accountable for their climate-related is then reflected by the discrepancies
oversight by proxy advisors, activist in short-term targets. There are
groups, and institutional investors alike. several resources that investors can
use to help track the climate change
Historically, shareholders have targets set by companies. This year
addressed their climate change the publication of the Climate Action
concerns to boards through filing 100+ Net Zero Benchmark further
shareholder proposals. In the US for helped us in the implementation of
instance, the number of climate-related climate-related votes. For any company
shareholder proposals filed has steadily in the benchmark that hadn’t set any
risen over the years, from 34 in 2012 relevant climate targets and hadn’t
PROXY VOTING SEASON OVERVIEW | 5
Board Composition
Directors bear a duty to represent the interests of the shareholders who
elected them. To do so effectively, boards require independence, diversity,
and relevant skillsets and backgrounds. Even when these prerequisites
appear to be satisfied, boards can fail to live up to shareholders’
expectations in other areas, as shown by Robeco’s voting on director
elections during the 2021 Proxy Voting Season.
Voting activity by a selected sample of proposal types
Proposal
Election of Directors
Election of Shareholder Representatives
Election of members of Statutory Auditors Boards
Ratification of Board Acts
Ratification of Management Acts
0% 20% 40% 60% 80% 100%
With management Against management
PROXY VOTING SEASON OVERVIEW | 6
BOARD COMPOSITION
with CEOs at some of America’s largest The Boeing Company
companies, did not actually include
anyone with dedicated energy industry Boeing is an American multinational
experience. So, it nominated four company, that together with its
candidates from the energy world in subsidiaries, designs, develops,
both the U.S. and Europe. Meanwhile, manufactures, sales, services, and
Exxon claimed to have evolved its supports commercial jetliners,
strategy and maintained its historical military aircraft, satellites, missile
leadership position among peers. defense, human space flight and
The nominations were very successful, launch systems, and services
resulting in three new members joining worldwide.
the board: an executive at Marathon
Petroleum and Andeavor, the former Meeting date: 20 April 2021
Executive Vice President of Renewable Our focus at this year’s AGM was
Products at Neste Oyj, and a strategist not only on the impact of the global
at Google’s owner Alphabet Inc and pandemic, but also on the 737-MAX
former US assistant secretary of energy. fatal crash controversy, the outcome
These directors were ultimately chosen of the investigation made by the
for their expertise in sustainability U.S. Department of Justice, and the
and the energy transition. Another related substantial material loss
ExxonMobil Corp resolution that gained shareholder and reputational damage. We were
approval relates to the disclosure concerned by the past performance of
Exxon Mobil Corporation operates on Exxon’s lobbying activities and two nominees up for re-election in the
petroleum and petrochemicals related spending, which asked the board, as they failed to fully exercise
businesses on a worldwide basis. company to account for whether and their fiduciary duties as member of the
The Company operations include how its lobbying aligns with the Paris audit committee. Thus, we decided to
exploration and production of oil and Agreement. vote against the re-election of these
gas, electric power generation, and directors, since they were serving
coal and minerals operations. Exxon In the end, Engine No. 1 won a very on the company’s audit committee
Mobil also manufactures and markets expensive proxy fight with only a tiny during the period when the 737-MAX
fuels, lubricants, and chemicals. .002 percent of the stock, by leveraging was in development and certification,
shareholder discontent to support a and therefore bore responsibility
Meeting date: 26 May 2021 business case for meaningful change. for overseeing the Company’s risk
Perhaps the most high-profile AGM of Although this was certainly helped assessment and management.
the year, Exxon’s shareholder meeting by Exxon-Mobil’s poor performance, Additionally, we voted against
marked a turn for the oil majors. In with losses last year of USD 22 billion the re-election of the Chair of the
addition to concluding a proxy fight (its worst performance in forty years), Nomination Committee as the Board
that had been building for months, it was also due to the quality of the has insufficient female representation.
multiple shareholder proposals were nominees which gained backing Besides that, we also voted against the
also filed with some of them receiving from some of the largest institutional Chair of the Compensation Committee
majority support. investors in the US. for not addressing persistent failures on
remuneration practices. This was the
ESG-focused activist investor Engine We supported all shareholder proposals sixth consecutive year we were voting
No. 1 filed resolutions at Exxon’s AGM (besides one ‘Trojan Horse proposal’, against the Advisory Vote on Executive
aimed at replacing four directors which aimed to limit progress on Compensation due to excessive pay-
with their own candidates. These climate-related issues) and dissident outs and substantial one-off payments
resolutions were part of a campaign board nominees, in addition to voting with no clear link to performance
to enhance climate oversight on the against the re-election of chairman criteria.
board and were supported by some of the board and lead independent
of the US’ largest pension funds. The director due to insufficiently addressing
core argument of Engine No. 1 was that shareholder concerns on climate.
ExxonMobil’s board, which is saturated
PROXY VOTING SEASON OVERVIEW | 7
Executive Remuneration
We continue to see a gradual improvement in executive compensation plans, but issues like a
lack of transparency and pay-for-performance still persist. Additionally, weak structures and
poor disclosures make it difficult for shareholders to gain a full understanding of how executives
are incentivized and why. During the 2021 AGM season we applied our standard framework
for remuneration that looks into the structure of pay for performance, quantum, the inclusion
of relevant ESG metrics, and reporting and accountability. Yet, this season we paid additional
attention to the impacts of the Covid-19 pandemic. Especially for companies that had received
state aid, laid off many employees, or had to cancel dividends, we expected companies to take a
more cautious approach to the remuneration of their CEOs.
Voting activity by a selected sample of proposal types
Proposal
Advisory Vote on Executive Compensation
Directors’ Fees
Remuneration Report
Remuneration Policy
Severance Packages
0% 20% 40% 60% 80% 100%
With management Against management
PROXY VOTING SEASON OVERVIEW | 8
EXECUTIVE REMUNERATION
Rio Tinto Plc
Rio Tinto Group engages in
finding, mining, and processing
mineral resources worldwide. The
company offers aluminum, silver,
molybdenum, copper, diamonds,
gold, borates, titanium dioxide, salt,
iron ore, and uranium.
Meeting date: 9 April 2021
In light of the Juukan Gorge incident in
May 2020, where an expansion of one
of the company’s iron ore mines led to
irreversible damage to a 46,000-year-
old Aboriginal cultural heritage site,
the company’s CEO was fired and his
vested LTIP of 2016 adjusted downward
by GBP 1 million. However, despite this
adjustment the total pay out to the
Booking Holdings CEO was nearly GBP 1.5 million higher
than the previous year. This led many
Booking Holdings Inc. provides travel shareholders to question whether the
and restaurant online reservation company’s downward adjustment was
and related services worldwide. The sufficient to account for the serious
company operates Booking. reputational damage the company
incurred in the aftermath of the Juukan
Meeting date: 26 May 2021 Gorge incident for which the CEO was
As a travel platform, Booking’s ultimately responsible. The company
performance has been heavily did not disclose clearly how it arrived
impacted by the pandemic, which at the applied reduction figure, nor
has led them to apply for state aid did it explain why the CEO was treated
in the Netherlands and an overall as an “eligible” leaver, which means
restructuring of the firm. Although his outstanding equity awards will
the need to retain key executives vest on their normal vesting dates,
throughout such a challenging time is subject to pro-ration. The height of the
evident, Booking’s method of retention remuneration is excessive for a year
is questionable. During the past where the CEO is leaving the company
financial year, the CFO has received due to the failure to implement an
discretionary retention bonus of USD adequate heritage management
10 million additional to his regular system. Therefore, we voted against the
long-term pay package. Despite the remuneration proposal.
important role the CFO will play in
the upcoming restructuring and his
relatively recent appointment of 2018,
the overall height of his compensation
is not commensurate to a year where
the company has faced such economic
hardship. As such, we voted against the
executive remuneration proposal at
the AGM.
PROXY VOTING SEASON OVERVIEW | 9
Shareholder Proposals
We support shareholder proposals on ESG topics if they support long-term,
sustainable shareholder value creation. Every AGM season, there are several key
issues take to the spotlight. This year, climate change reporting and human rights
standards were repeatedly addressed through shareholder proposals.
Voting activity by a selected sample of proposal types
Proposal
Reporting and Reducing
Greenhouse Gas Emissions
Reporting and action on climate Change
Compliance with International
Human Rights Standards
Election of Dissident Board Member
Reviewing Political Spending or Lobbying
0% 20% 40% 60% 80% 100%
For Against Abstain
PROXY VOTING SEASON OVERVIEW | 10SHAREHOLDER PROPOSALS
by the media for not doing enough to and responsible use of the company’s
protect user privacy, with numerous facial recognition technology. We
allegations of private data misuse, and supported all of the 11 shareholder
we engage with the company on the proposals, asking the company to take
social impact of artificial intelligence. action on these topics, aiming to make
We believe that board-level oversight the company a more transparent and
of human rights considerations is conscientious corporate citizen. Even
a positive step and in line with our though the shareholder resolutions
engagement asks. Additionally, we were non-binding, they were a way to
supported the SHP asking for a third- raise our concerns on certain corporate
party review of the whistleblower policy policies and put pressure on improving
effectiveness. Taking into consideration Amazon’s practices related to civil
the risks the company faces due to rights, equity, diversity, and inclusion.
ineffective whistleblower protections,
and given the recent controversies, we Among the 11 proposals submitted by
believe that the request outlined in this shareholders, we supported the one
proposal would benefit shareholders. asking from the company’s board to
adopt a policy to require that the chair
Lastly, shareholders requested the of the board shall be an independent
company prepare a report assessing director who has not previously
Alphabet Inc the feasibility of integrating served as an executive officer. From a
sustainability and diversity metrics in shareholder’s point of view, we believe
Alphabet Inc. operates as a holding its executive compensation program. that an independent chair strengthens
company. The Company, through its In the prior year, the same resolution corporate governance and has a better
subsidiaries, provides web-based was supported by 13.1% of the votes, oversight of management practices,
search, advertisements, maps, showcasing that shareholders do leading to shareholder value creation.
software applications, mobile value the integration of environmental
operating systems, consumer content, and social factors into the business We also supported the resolution
enterprise solutions, commerce, and strategy. We believe that the adoption asking the company to report on
hardware products. of this proposal is necessary, and thus plastic packaging and setting goals
we supported this SHP also this year, to reduce the impact of plastic
Meeting date: 2 June 2021 and we encourage the company to pollution. According to the proponent’s
Alphabet was one of several large introduce a bonus program that links statement, Amazon approximately
American tech company that was executives’ compensation to specific generates 465 million pounds of plastic
targeted by a handful of shareholder ESG goals. packaging waste, of which 22 million
proposals (SHP) focusing on social ends in the ocean. We acknowledge
and corporate governance topics. Amazon.com Inc. the environmental risks coming from
We supported the SHP requesting plastic pollution and we encouraged
the board to initiate a 7-year Amazon.com Inc. is a U.S. the company to take necessary action
recapitalization plan, that would multinational technology company to address this issue by supporting this
ultimately result in one vote per share. that engages in the retail sale of resolution.
We view this plan to be on the best consumer products and subscriptions,
interest of minority shareholders, in North America and internationally. Additionally, we supported the
allowing them to have an equal voice The company focuses on e-commerce, resolution asking the board to adopt
and express it with their votes when it cloud computing, digital streaming, a policy that promotes representation
comes to important matters. and artificial intelligence. of employees’ perspectives among
corporate decisions, by including
We also supported the SHP asking the Meeting date: 26 May 2021 employees in the list of candidates
nominating committee to add at least The shareholder proposals up for put forward by the Nominating and
one candidate to the board who has vote at Amazon’s annual shareholder Governance Committee. Employee
human and/or civil rights expertise. meeting largely concerned racial and representation on the board helps
The company has received criticism equity issues, as well as antitrust topics, companies consider the views of an
PROXY VOTING SEASON OVERVIEW | 11SHAREHOLDER PROPOSALS
important stakeholder group, and progress from 2022 onwards. Meeting date: 12 May 2021
is standard practice in some other BP was one of several oil and gas
markets. Even though it is not prevalent The company was disappointed by companies in 2021 where shareholder
in the US yet, we believe it could play the filing of this resolution given the activism organisation Follow This filed
an important role in ensuring more support they had received (99%) resolutions requesting Paris-aligned
responsible company management. for their own climate policy at last GHG reduction targets. The proposals
year’s AGM. Their previously approved are important gauges of investor
Lastly, we voted in favor of the three strategy includes a new carbon support for companies’ existing climate
resolutions asking for an analysis footprint tracking tool and financing plans, and what action shareholders
of the company’s impact on civil restrictions for select carbon-intensive believe companies should take to
rights, a human rights impact report industries. Barclays has also already ensure they contribute to the goals of
assessing the risks incurred by facial committed to achieving net-zero the Paris agreement.
recognition technology, and a report emissions by 2050 and maintaining
on customer due diligence related to alignment with the Paris agreement. We supported the shareholder proposal
facial recognition products. Robeco The company’s main concern is around at BP, since it requested the company to
co-filed the resolution on enhanced the phrasing of ‘phase out’, which they set Scope 1,2, and 3 emission reduction
customer due diligence as part of feel does not provide enough flexibility targets over the short, medium, and
our engagement with the company to carry out a ‘transition’. However, we long term. The proposal is also asking
on the social impact of artificial believe the resolution is not in conflict for the company to report annually
intelligence. The proposal received with the Barclays current climate on the GHG emissions reduction plan,
35% of votes in favor. Amazon was strategy and would provide greater which we believe should be tied to
among many other companies that insights into specific lending activities a non-binding shareholder vote on
last year made supportive statements and how they align with the ultimate progress. The reason that the proposal
on the Black Lives Matter movement, 2050 net-zero target. As a result, we adds value in the case of BP is that the
and those proposals practically focus supported the resolution. company did not put forward a Say on
on mitigating human rights risks Climate resolution in 2021. Supporting
and violations and promoting racial Nonetheless, the resolution was not the resolution acts as an important
equality. adopted as it only received 14% support signal that formalized progress
from shareholders. This will likely not reporting and shareholder feedback
Barclays Plc be the last time Barclays sees such a mechanisms are a vital component of
resolution given that the pressure to climate leadership.
Barclays PLC is a global financial escalate climate strategies is mounting.
services provider engaged in retail A long-term commitment to net-zero Recognizing the targets that BP
banking, credit cards, wholesale by 2050 is no longer credible without had already set, we saw further
banking, investment banking, wealth providing clear short- and medium- room for improvement on coverage
management, and investment term pathways and targets. Although of all emissions scopes and board
management services. we recognize formulating such targets accountability for implementation.
is challenging due to data gaps and Our support for this resolution was
Meeting date: 5 May 2021 market uncertainties, it increases primarily meant to foster accountability
At this year’s AGM, Barclays faced accountability for Barclays’ climate via reporting and feedback
a shareholder resolution aimed at transition strategy. mechanisms. We believe that Say on
accelerating and improving their Climate resolutions (e.g. periodically
climate strategy. A group of individual BP plc on strategy, annually on disclosure)
investors coordinated by Australian are key elements of climate leadership
nonprofit Market Forces filed the BP plc is an oil and petrochemicals in the sector. In our vote we also
resolution that called on Barclays to company. The Company explores considered the findings of the Climate
bring its financing for coal, oil, and gas for and produces oil and natural Action 100+ Net Zero Benchmark.
companies in line with the goals of the gas, refines, markets, and supplies
Paris climate agreement. Specifically, petroleum products, generates The shareholder proposal received just
the proposal asked to set Paris-aligned solar energy, and manufactures and over 20% support from shareholders
targets for the phaseout of fossil fuel markets chemicals. at the AGM. We believe this sends a
financing and to report on subsequent clear message, and the board has
PROXY VOTING SEASON OVERVIEW | 12SHAREHOLDER PROPOSALS
committed to continuing engagement Meeting date: 12 April 2021 Facebook Inc.
with shareholders on its climate plans, The resolution filed by Follow This at
and to report on the progress of this several Oil & Gas companies was also Facebook Inc. is a U.S. multinational
engagement regularly, in line with the filed at ConocoPhillips’ AGM and is conglomerate focusing on
UK Corporate Governance Code. substantially similar to the rest. The information technology. Facebook
resolution asks for the establishment offers products and services globally
Chevron Corp of Scope 1, 2, and 3 GHG reduction through its social networking
targets, and would add value because platforms, Facebook, Facebook
Chevron Corporation is an integrated the company has not set short-term Messenger, Instagram, WhatsApp.
energy company with operations GHG reduction targets and Scope
in countries located around the 3 is insufficiently covered, as per Meeting date: 26 May 2021
world. The Company produces and the Climate Action 100+ Net-Zero At this year’s Facebook AGM, there
transports crude oil and natural gas. Benchmark. Therefore, based on were once again many shareholder
Chevron also refines, markets, and our guidelines for climate related resolutions up for vote. These
distributes fuels, as well as is involved shareholder proposals, we have proposals were asking for Facebook to
in chemical and mining operations, supported the resolution. improve their corporate governance
power generation, and energy practices, to combat potential legal
services. Equinor ASA and reputational risks, and to promote
human rights.
Meeting date: 27 May 2021 Equinor ASA operates as an energy
Similar to previous years, there were company. The Company develops oil, Shareholders requested that the
several climate-related shareholder gas, wind, and solar energy projects, company gradually eliminate the
proposals put forth at Chevron’s recent as well as focuses on offshore special class of super-voting shares
AGM including one filed by Dutch operations and exploration services. that the CEO has, which gives him
shareholder advocacy organization, Equinor serves customers worldwide. the majority voting control of the
Follow This, asking the company to company. We supported this resolution
set Paris-aligned emission targets. In Meeting date: 11 May 2021 since we believe that one vote
general, we support such resolutions During Equinor’s annual meeting per share generally operates as a
especially when companies have of shareholders a similar resolution safeguard for common shareholders.
not set scope 1, 2, and 3 targets was filed requesting the company to We also supported the shareholder
for across short-, medium-, and set Paris-aligned emissions targets. resolution asking for the board chair
long-term horizons and have not Equinor is not a laggard in the climate to be independent. We believe that
presented shareholders concrete transition and already has a long-term an independent chair is in a better
implementation plans (for example climate ambition. Nonetheless, we position to uphold shareholders’ best
via a Say on Climate) vote. As Chevron have voted in favor of the resolution as interest and oversee management
has not sufficiently classified GHG Equinor has not sufficiently translated decisions. We favored both proposals
emissions reductions across all scopes the long-term ambition into short-term since they contribute to improved
of emissions, we have supported this targets. corporate governance practices and
proposal. As the company has also not increase board accountability.
met any of the criteria around target Several other climate related
setting based on the Climate Action resolutions were filed, including Regarding social issues, again this
100+ Net Zero Benchmark, we also requests for the discontinuation of year two resolutions were submitted
voted against the Chairman of the overseas business or specific changes requesting human/civil rights expertise
Board. in the company’s product mix such as to be added to the board, and
inclusion of nuclear power. We believed reporting on online child exploitation.
ConocoPhillips that many of these resolutions were We believe that the company should
too disruptive and prescriptive to the address the increasing sexual child
ConocoPhillips explores for, produces, company’s ongoing business whereas exploitation issue due to the encrypted
transports, and markets crude oil, the resolution on setting Paris-aligned messaging services provided on
bitumen, natural gas, liquefied emissions targets are more helpful their platforms. It is necessary for
natural gas (LNG), and natural gas to guide Equinor through the energy the company to assess, report and
liquids worldwide. transition. proactively address this sensitive issue,
PROXY VOTING SEASON OVERVIEW | 13SHAREHOLDER PROPOSALS
and to efficiently mitigate potential contributions to an effort to strike steadily received increasing support,
operational and reputational risks. down the Affordable Care Act, limit culminating in 37% of shareholders
women’s reproductive rights, and roll supporting the proposal in 2021.
Shareholders proposed that the back climate regulations. Although s all shareholder proposals filed at
nominating committee will nominate the company defended its current the AGM received sizeable support,
at least one candidate on the board, contributions by explaining they do we expect Pfizer to act accordingly.
who has human/civil rights expertise. not equal endorsements, nearly half However, it should be noted that
We were among the 4.06% of the of all shareholders agreed with the shareholder proposals are advisory
shareholders who supported this proponent that current practices in nature and none of the proposals
proposal. We believe that a director appear misaligned and could cause received majority support.
with this type of experience within reputational damage. We supported
the board, would better help face the proposal along with 47% of Johnson & Johnson
human-right-related risks and ensure shareholders, a very large support rate
accountability and oversight. We were for a SHP in its initial year of filing. Johnson & Johnson researches
pleased to see the company launching and develops, manufactures, and
its corporate human rights policy Besides the elections, Covid-19 sells various products in the health
in March 2021, but an independent heavily impacted 2020. As one of the care field worldwide. It operates
director with experience in the field producers of an FDA approved vaccine, in three segments: Consumer,
is highly important, given Facebook’s Pfizer came out on top in the race to Pharmaceutical, and Medical Devices.
preeminent role in the social media halt the pandemic. Shareholders filed
landscape and the risks this entails. a SHP asking the company how public Meeting date: 22 April 2021
financial support for development Johnson & Johnson (J&J) had four
Finally, we supported the proposal of vaccine or therapeutics for COVID- shareholder proposals (SHP) filed at
asking the company to report on 19 is being taken into account in this year’s AGM. Perhaps the doubling
reducing false and divisive information. access to such products, such as of the number of SHPs filed at its AGMs
Shareholders need detailed price-setting. This proposal merges compared to recent years was due to
information to assess how the company a long-standing concern of rising J&J’s successful creation of a Covid-19
is managing and mitigating related drug prices and the contemporary vaccine which put it in the limelight.
risks by the misuse of their platforms. concern of the global pandemic. While Alternatively, the high number of SHPs
Pfizer maintains it has not received might be a sign of the diverse topics of
Pfizer Inc any direct US government funding, importance to shareholders during this
we acknowledge the proponent’s AGM season. We expect shareholder
Pfizer Inc. develops, manufactures, argument that it has benefitted resolutions to continue to grow in
and sells healthcare products strongly from indirect support and that number in the coming years, reflecting
worldwide. transparency on how the company the increased focus on ESG topics by
aims to ensure access to its products investors.
Meeting date: 22 April 2021 would benefit shareholders. Therefore,
At Pfizer’s 2021 AGM, two out of the we also supported this resolution. The Historically, SHPs at J&J have focused
three shareholder proposals (SHP) proposal received 28% support from on governance topics of remuneration
that were filed were heavily influenced shareholders. and independent oversight. These
by the major events of 2020, the US topics also returned at this year’s AGM
elections and Covid-19. The first SHP The third proposal that was filed at and received sizeable support with one
asked Pfizer to publish an annual report Pfizer is a recurring one in the US SHP asking for an independent chair
analyzing the congruency of political asking for a company to have an (43%) and another for a bonus deferral
and electioneering expenditures during independent chair. We voted for this policy (22%). We supported both these
the preceding year against publicly proposal because we believe that proposals since they are in line with
stated company values and policies. an independent chair is in the best best practices.
The proponent was motivated to file position to diligently oversee the
the SHP because they found several executives of a company and set a This year’s AGM also saw the
contradictions in the company’s pro-shareholder agenda. This was the introduction of two new SHPs with
current political spending and its fifth consecutive year this proposal topics closely tied to recent events.
values. Some examples listed were was brought to Pfizer’s AGM and it has The first SHP was filed at several
PROXY VOTING SEASON OVERVIEW | 14SHAREHOLDER PROPOSALS
pharmaceutical companies who Meeting date: 18 May 2021 of votes cast, representing widespread
were successful in creating a Covid- During Shell’s 2021 AGM, two acknowledgement of the strength
19 vaccine. It asked the company important climate-related proposals of its transition plan. Meanwhile,
to report on how public financial were on the agenda. Resolution 20 shareholders also voiced their view
support for development of a vaccine represented an industry first, as Shell on the further development of Shell’s
or therapeutics for COVID-19 is being put forward its own climate transition targets, as the shareholder resolution
taken into account in access to such plan for a shareholder vote. Resolution received 30% of votes in favor.
products, such as price-setting. We 21 was a shareholder proposal on
believe this proposal helps ensure greenhouse gas reduction targets. Toshiba Corporation
that any medical breakthroughs We supported Shell’s proposal for
derived from the public’s contribution approval of the Energy Transition Toshiba Corporation manufactures
will be priced in an accessible way Strategy (Say on Climate), because in and markets electrical and electronic
so that communities of all income our assessment, the climate plan is products. The Company’s products
levels will benefit equally. Therefore, currently one of the most elaborate include digital products such as
we supported the proposal which and advanced plans in the oil and gas PCs and televisions, NAND flash
gained support of nearly 32% of the sector. While supporting the resolution, memories, and system LSIs (large-
shareholders. we recognize that the plan will require scale integrated), as well as social
updates and further improvements infrastructures such as power
The final SHP filed at the AGM appears in the coming years. At the AGM, generators, medical equipment, and
to be closely linked to the global we expressed our desire for Shell to home appliances.
support gained by the BLM movement increase pace and to already make
during 2020. The proposal asks the significant steps in the near future. Meeting date: 18 March 2020
company to conduct and publish a third- This aligns with the progress we have We supported two shareholder
party audit to review the racial impact expected and seen from Shell during resolutions at Toshiba’s EGM, both of
of its policies and practices, to provide our engagement under the Climate which were put forth by large activist
recommendations for improving the Action 100+ initiative. Following the shareholders, Effissimo and Farallon
company’s racial impact. The company AGM and a court ruling regarding its capital management.
has already made a commitment to transition plan in The Hague, Shell has
address certain racial issues within its already further advanced its plans and At Toshiba’s 2020 annual shareholder
products and product development ambitions. meeting, Effissimo tried to have its
and we believe this proposal would co-founder Yoichiro Imai nominated
further promote the integration of In addition, a shareholder proposal to Toshiba’s board, along with other
diversity and inclusion. Over a third of was filed for Shell to set climate- directors. When that proposal was
all shareholders shared this sentiment related targets in the long, medium, rejected and management’s own
and supported the proposal. and short term. In our assessment, slate of directors were appointed
Shell has already set one of the most instead, it was viewed as a setback
The wide spread of SHP topics indicates advanced targets in their sector, and for shareholders who sought more
that companies need to increasingly the company should instead focus influence at the conglomerate after
broaden their scope of attention to on implementation in its next steps. years of accounting scandals. However,
meet shareholder and community Therefore, we abstained from voting on suspicion soon arose around the actual
expectations of good corporate this resolution. We generally support processing of ballots and how votes
responsibility. these resolutions when companies were counted. One shareholder with
have not set robust targets (scope 1, 2, a 1.3% stake reported that its votes
Royal Dutch Shell and 3 for long-, medium-, and short- weren’t counted, despite being mailed
term horizons) and have not presented several days before the deadline.
Royal Dutch Shell PLC, through concrete implementation plans. Effissimo contends that the internal
subsidiaries, explores, produces, However, this needs to be balanced investigation by Toshiba’s Audit
and refines petroleum. The Company with the significant progress that Shell Committee of the 2020 AGM
produces fuels, chemicals, and had already shown on the specific asks was inadequate and inherently
lubricants. Royal Dutch Shell owns for the resolution. compromised because committee
and operates gasoline filling stations Shell’s own Say on Climate vote members were investigating
worldwide. received the support of around 89% allegations of misconduct directly
PROXY VOTING SEASON OVERVIEW | 15SHAREHOLDER PROPOSALS
connected with their own election
as directors. Shareholders therefore
deserve a credible independent
confirmation that the integrity of their
voting rights were upheld, which is why
Effissimo proposed to elect a special
investigative committee at the 2021
shareholder meeting. The committee
will serve for a period of three months
and their compensation has already
been determined. This alleviates any
potential concerns around maintaining
the independence of this committee’s
investigation.
On another note, Farallon’s
shareholder proposal asks the company
to put forth and explain their capital
management policy and report on their
adherence to it. The proponent argued
that the company failed to meet
previous commitments to disclose how
it would use its funds and expressed
concern about management’s plans to
deploy its capital for M&A. Given that
this request provides more insights into
the company’s previously questioned
capital management and is not
overly prescriptive, we supported this
proposal.
Ultimately, only the Effissimo proposal
was passed by shareholders, which
is only the fourth time an activist
shareholder proposal has won approval
in Japan and the first at a major
company. This outcome signals the
rise of corporate accountability in
Japan and demonstrates the role of
shareholders in upholding corporate
governance best practices.
PROXY VOTING SEASON OVERVIEW | 16SHAREHOLDER PROPOSALS PROXY VOTING SEASON OVERVIEW | 17
Say on Climate
Over the last couple of years, shareholders have increasingly asked CO2 emitting
companies to set carbon reduction targets in order to mitigate climate change. This
year, many resolutions were filed with such demands. As we believe that climate
change has inherent risks for companies, we tend to support such resolutions if a
company has not set long, mid and short-term targets for their relevant scopes of
emissions, or has failed to report on progress.
Voting activity by a selected sample of proposal types
Proposal
Say on climate proposal
0% 20% 40 60% 80% 100%
For Against Abstain
PROXY VOTING SEASON OVERVIEW | 18SHAREHOLDER PROPOSALS
Meeting date: 28 May 2021 corporate financing and underwriting
HSBC put its climate policy to vote at its to companies that are highly
recent AGM and received 99% support. dependent on coal mining and/or coal
We also voted in favor of the resolution, power, as well as companies planning
given the significant strides taken by new coal mines, coal plants and coal
the company. The result was preceded infrastructure, 2.) commitment to help
by pressure from a shareholder clients develop, publish and implement
resolution filed by a USD 2.4 trillion coal phase-out plans in line with the
investor coalition led by ShareAction 2030/2040 timelines by a specific date
that was ultimately withdrawn. and no later than December 2023, 3.) a
commitment to focus on the entire coal
ShareAction expressed its support for supply chain, including coal equipment
HSBC’s own proposal instead. manufacturers and any other coal
HSBC has committed to phase out supply chain function that contributes
financing (project finance, corporate to the expansion of coal-related
finance, and underwriting) of coal- activities. Following the AGM, we will
fired power and thermal coal mining continue to monitor how HSBC upholds
in the EU and OECD by 2030 and other their new commitments.
regions by 2040. This is an important
move by the bank given its exposure Moody’s Corporation
In the 2021 AGM season, we have also to Asia, and HSBC’s global rank as
seen the introduction of management the world’s 15th largest coal power Moody’s Corporation provides credit
proposals in relation to their climate financer. To date, HSBC has been one ratings and assessment services; and
strategies. Unilever, Royal Dutch Shell, of the only European banks with no credit, capital markets, and economic
Total, and Nestlé were some of the corporate financing restriction for research, data, and analytical tools
first large companies to ask for an companies exposed to the thermal coal worldwide. It operates through two
explicit shareholder advisory vote on sector and has provided more than USD segments, Moody’s Investors Service
their climate strategies or reporting. 15 bn of financing to coal developers and Moody’s Analytics.
We expect that by having a frequent from October 2018 to 2020.
shareholder vote, best practices will Meeting date: 15 April 2021
evolve in terms of reporting, ambition HSBC acknowledged that expansion of During this year’s AGM the company
levels and progress for the mitigation coal-fired power is incompatible with sought shareholder approval of
of climate change. Therefore, we have the goals of the Paris agreement. This their decarbonization plan. The
generally supported such proposals if is a relatively big turnaround given Say on Climate resolution reflected
they meet a set of criteria, including the company’s previous stance and the management’s ambitions as of
that the company in question had set financing of coal-related activities. December 2020 to reduce emissions
a Net Zero Ambition, and that it had HSBC has also committed to set, and align business operations with
presented concrete implementation disclose, and implement a strategy multiple global initiatives. The proposal
plans for achieving its long-, mid- and with short- and medium-term targets might even be part of the larger
short-term targets. to align its financing across all sectors business strategy by the ratings service
with the goals of the Paris climate provider, as sustainability data and
HSBC Holdings plc agreement, starting with oil & gas solutions become increasingly more
and power & utilities sectors. It will important. The company has set an
HSBC Holdings plc (HSBC) is a banking use 1.5°C pathways that are not ambitious plan including scenario
and financial services company. The overly reliant on negative emissions analyses, a Paris-aligned net zero
Company manages its products and technologies. commitment and science-based
services through three businesses: emission reduction targets for scope
Wealth and Personal Banking (WPB), The company will publish a new coal 1, 2 and 3. We voted in favor of the
Commercial Banking (CMB), and policy by the end of 2021 which is resolution. Following the AGM, we
Global Banking and Markets (GBM). expected to include several elements, will continue to monitor how Moody’s
namely: 1.) a prohibition of general climate plans develop further.
PROXY VOTING SEASON OVERVIEW | 19SHAREHOLDER PROPOSALS
Total SA Unilever Plc
Total SA explores for, produces, Unilever plc, together with its
refines, transports, and markets subsidiaries, operates in the
oil and natural gas. The Company fast-moving consumer goods industry
also operates a chemical division worldwide. It operates through three
which produces polypropylene, segments: Beauty & Personal Care,
polyethylene, polystyrene, rubber, Foods & Refreshment, and Home
paint, ink, adhesives, and resins. Total Care.
operates gasoline filling stations in
Europe, the United States, and Africa. Meeting date: 5 May 2021
Unilever was one of the first global
Meeting date: 17 May 2021 companies that had voluntarily
Total meets several of the criteria committed to put its climate transition
Robeco uses to assess Say on Climate plans before a shareholder vote. The
votes. In particular, the company company explained that the proposal
has set a Net Zero Carbon Target or sought to promote discussion and
Ambition, and concrete plans and engagement with all shareholders on
intermediary targets in the short and climate issues. The Company provides
medium term have been published. thorough reporting concerning its
Further, the proposal is based on Paris- climate strategies and initiatives and
aligned scenario analysis, and progress has made credible plans to mitigate its
is reported in line with the TCFD climate impacts, including an ambition
framework. to achieve net zero Scope 1, 2, and
3 emissions by 2039. As such, we
However, Total will not be asking for supported the proposal.
shareholder approval on an annual
basis. The reason is that the legal
system in France makes it difficult to
implement an annual vote on such a
proposal. We will continue to monitor
this, as we would prefer regular votes.
Total has set scope 3 targets for 2050
and 2030 and short-term targets
are only available for scope 1 and 2.
Still, we supported this proposal as
it provides a strong framework for
further engagement and the company
provides disclosure around its emission
reduction activities.
PROXY VOTING SEASON OVERVIEW | 20SHAREHOLDER PROPOSALS PROXY VOTING SEASON OVERVIEW | 21
ROBECO’S PROXY VOTING APPROACH
Robeco’s Proxy Voting Approach
Voting Policy
Robeco encourages good governance and sustainable corporate practices, which contribute to
long-term shareholder value creation. Proxy voting is part of Robeco’s Active Ownership approach.
Robeco has adopted written procedures to ensure that we vote proxies in the best interest of our
clients. The Robeco policy on corporate governance relies on the internationally accepted set of
principles of the International Corporate Governance Network (ICGN). Our voting policy is formally
reviewed at least once a year. We also take into account company specific circumstances and best
practices when casting our vote. By making active use of our voting rights, Robeco can, on behalf
of our clients, encourage the companies to increase the quality of the management of these
companies and to improve their sustainability profile. We expect this to be beneficial in the long
term for the development of shareholder value.
External Credibility
Robeco’s integrated approach to active ownership is widely recognized as best practice in the asset
management industry. The quality of our approach was confirmed in the UN PRI assessment,
where we attained the highest possible score (A+) for active ownership, and in a recent survey
by Share Action, who ranked Robeco amongst the top performers in their survey ‘Responsible
Investment Performance of European Asset Managers’.
Robeco’s Active Ownership Team
Robeco’s voting and engagement activities are carried out by a dedicated Active Ownership Team.
The team is based in Rotterdam, the Netherlands, and Hong Kong. As Robeco operates across
markets on a global basis, the team is multi-national and multi-lingual. This diversity provides
an understanding of the financial, legal and cultural environment in which the companies we
engage with operate. The broad expertise of the Active Ownership team is complemented by
access to, and input from, investment professionals based in local offices of Robeco around the
world. Together with our global client base we are able to leverage this network to achieve the
maximum possible impact from our Active Ownership activities. The Active Ownership team is
part of the Robeco SI Center of Expertise and is headed by Carola van Lamoen.
PROXY VOTING SEASON OVERVIEW | 22ROBECO’S PROXY VOTING APPROACH
About Robeco
Robeco Institutional Asset Management B.V. (Robeco) is a pure play international asset manager founded in
1929. It currently has offices in 15 countries worldwide and is headquartered in Rotterdam, the Netherlands.
Through its integration of fundamental, sustainability and quantitative research, Robeco is able to offer
institutional and private investors a selection of active investment strategies, covering a range of asset
classes.
Sustainable investing is integral to Robeco’s overall strategy. We are convinced that integrating
environmental, social and governance (ESG) factors results in better-informed investment decisions. Further
we believe that our engagement with investee companies on financially material sustainability issues will
have a positive impact on our investment results and on society.
More information can be found at: https://www.robeco.com
PROXY VOTING SEASON OVERVIEW | 231328-08’21
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