Monday, June 27

£262bn investor says it will target bosses who fail on climate or human rights | invest

Aviva Investors, a major UK asset manager, has warned the directors of 1,500 companies that it is willing to seek their removal if they do not show enough urgency to tackle issues including the climate crisis and human rights.

The firm said how it votes on the re-election of the company’s board members at the upcoming AGM season would be heavily influenced by its four key management priorities for the year, which also include the biodiversity and executive compensation.

In its annual letter to 1,500 companies in 30 countries, including the UK, Aviva Investors urged companies to develop their own biodiversity action plans, publicly declare their commitment to human rights, with proper due diligence, and ensure that Executive pay plans, particularly bonuses, are met. tied to your four management priorities.

Aviva Investors, which manages £262bn in assets, including savings and pensions, and is a major shareholder in many leading companies, said its strong message was part of efforts to create a more sustainable, inclusive and low-carbon future. .

“We recognize the magnitude of many of these challenges and will assess companies based on the strength of their commitments and their ability to demonstrate progress over time,” the asset manager said. “However, we will hold boards and individual directors accountable when the pace of change does not reflect the urgency required.”

Last year, Aviva’s concerns about a lack of ethnic diversity on company boards, which was one of its management priorities in 2021, led to votes against directors at 137 companies. He has opposed board members of 85 companies on human rights grounds, including US meat processing company Tyson Foods, which has been accused of neglecting its workers during the pandemic.

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Aviva also rejected 33% and 68% of executive pay proposals in the UK and US, respectively, amid concerns about salary levels and the structure of compensation plans.

Aviva Investors CEO Mark Versey said this year’s management priorities were meant to “encourage companies to consider the full picture of sustainability because that’s how they will generate the highest return for shareholders, while helping build a better future for society. ”.

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Aviva welcomed the promises of change that some companies had made, including during the Cop26 climate summit in Glasgow. However, Versey said that “companies must now turn their commitments into concrete and measurable delivery plans.”

He added: “Our charter sets out clear expectations for how they should do this and what those plans should address in relation to climate impact, biodiversity and human rights.”

In terms of climate commitments, Aviva Investors said all companies should develop credible climate transition plans and work to have them officially verified by the science-based targets initiative. Companies are also expected to measure their climate risks and emissions using new climate accounting standards.

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