Shareholders increasingly vocal about sustainability

The annual general meeting (AGM) gives shareholders an excellent opportunity to shape company policy by voting, giving advice and making proposals. Any shareholder, no matter how many shares they own, may use the microphone to put questions to the members of the executive and supervisory boards. AGMs are important because they give a clear picture of the issues shareholders are concerned about. And increasingly, those issues involve sustainability.

Grabbing that microphone

Financial reporting continues to be an important part of the AGM, as is voting on appointments and dividends. But sustainability is also becoming a main topic of concern.

That goes for ABN AMRO, too, as was clear at the bank’s own AGM held in April. Multiple shareholders, including NGOs, asked questions specifically about the bank’s sustainability policy. When handed the microphone, one representative of a large pension fund asked the Board about the bank’s scope 3 emissions – the carbon emissions generated by homes and companies the bank finances. It’s an issue that certainly has our attention, since the bank is actively encouraging clients in every sector to reduce their emissions.

There were also questions about our plans relating to biodiversity. Here, too, major steps have to be taken. The bank, for its part, recently launched a partnership to green the built environment. Another query involved our definition of a living wage and whether we might include this point in our publications. ABN AMRO has incorporated the living wage in its policies for a number of sectors, such as oil and gas extraction. We will be exploring in the coming months whether we can apply this more widely.

Future-proof

Clearly, the AGM is becoming a platform for companies to address social issues. That’s exciting because it shows that investors aren’t focused on financial results alone, but also – and increasingly – on sustainability and long-term value creation. Being a responsible shareholder is good for people and the planet, and helps ensure the company itself is future-proof.

According to a recent survey conducted by the consultancy firm BDO, 97% of all EU companies say they anticipate changes to their business model and operations as a result of sustainability. Of these companies, 22% believe that sustainability will reshape their business altogether. That’s why it’s important for the individual shareholder and co-owner to know how future-proof and how prepared for the energy transition a company is.

Setting a more sustainable course

By giving advice, asking questions and voting at shareholder meetings, shareholders have the power to steer companies in a more sustainable direction. It’s a role the bank itself is increasingly taking on as well. We make our voice heard at the AGMs of companies our clients invest in, and often join forces with other major shareholders. By asking questions and by voting in favour of social and sustainability objectives, the bank and other shareholders can encourage companies to cut their emissions, respect human rights and minimise their use of natural resources. That’s exactly how shareholders can accelerate the transition to sustainability.

Solange Rouschop, ABN AMRO Chief Sustainability Officer