Engagement - voting

To motivate and stimulate change at companies that are included in the Triodos Sustainable Investment Universe, the fund votes at the Annual General Shareholders’ meetings (AGM) of those companies. Voting advice is obtained from PIRC Services. Triodos SICAV I then applies its own voting guidelines and reviews each recommendation before voting. The fund deviated from PIRC’s standard voting recommendations for 7% of all agenda items. In 2015, the fund voted at 125 shareholder meetings. The fund voted in line with company management on 59% of the agenda items. In 2015, the fund’s proxy voting guidelines were strengthened, particularly with regard to board diversity. The fund has also become stricter with respect to the independence of board committees. As a result, the fund has seen a decline in the percentage of votes in line with company management as compared to last year (59%, against 63% in 2014). Other voting topics on which the fund continues to have a critical stance are remuneration policies and the independence of auditors.

The fund aims to inform companies in advance about how it intends to vote at their AGMs. Twenty-six companies replied to the feedback letter and in several cases this triggered an interesting debate. For example, as a result of the fund’s debate with Toyota Motor and Continental, the fund changed its vote on one of the resolutions. In the case of RELX (formerly Reed Elsevier), additional contact led to RELX changing one of its agenda items.

In 2015, the fund voted on 52 shareholder resolutions. It voted in favour of 34 of the resolutions. At the meeting of Time Warner, for instance, the fund supported a shareholder resolution requesting the company to adopt a target for reducing absolute greenhouse gas (GHG) emissions and issue a report on its plan for achieving this goal. On September 15, the company announced a new two-year goal consisting of a 30% reduction of carbon intensity by 2016 year-end.

In early 2015, Triodos SICAV I sent a letter to 119 investee companies ahead of their AGMs, explaining the fund’s main voting principles and raising questions about gender diversity at board level. The fund believes that companies with more diverse boards, aligned with the company’s activities and customers, stimulate creativity and innovation. Thirty-seven companies replied to our questions and provided additional information and answers. The fund used this information to decide whether or not to support the election of directors. For further information we refer to the semi-annual report of Triodos SICAV I.

In December 2015, Triodos SICAV I sent a letter to 110 investee companies to announce that for the 2016 AGMs the fund will focus on climate change. The ambitious goal of keeping the temperature rise well below the agreed 2 degrees Celsius during the December 2015 UN Climate Change Conference (COP21), can only be achieved with the support of all members of society, including the private sector. A corporate climate protection strategy starts with full support from the board. It requires boards to develop a climate strategy policy and to monitor progress. In the letter, the fund calls upon companies to disclose their strategies for climate protection, to develop targets that are in line with the COP21 Universal Agreement, to disclose their roadmaps for meeting those targets and their annual progress towards those targets, and to refrain from lobbying against policies aimed at meeting the Universal Agreement. During 2016, the progress made by companies towards these targets will be closely monitored and incorporated in the fund’s voting decisions at AGMs.

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