BMO GAM active shareholding: climate and social themes dominant in 2021

BMO Global Asset Management (EMEA), which continues under the new brand Columbia Threadneedle Investments in July 2022, has today published the 2021 Stewardship Report. The report describes how BMO GAM has shown its shareholding (commitment) with more than 940 companies worldwide. In the dialogues with the companies, important topics such as working conditions, climate change and biodiversity were discussed.

Almost half of all ‘exposures’ (45%) were related to societal and social issues, especially working conditions, followed by environmental issues (34%) and good governance (22%). The majority (85%) of engagement activities were based on the UN Sustainable Development Goals, and in particular on SDG 12 (Sustainable Consumption and Production), SDG 13 (Combating Climate Change) and SDG 8 (Including economic growth, employment and decent work for all). .

The report explains how BMO GAM continues to make an effort to create positive changes in companies in which the asset manager invests. For example, a quarter more companies were contacted than in 2020. An important breakthrough was achieved in 388 interviews. That is, companies have adapted their ESG policies and activities in line with the MET engagement targets. Of these, 44% related to improvements at the corporate governance level, 22% to climate change and 14% to working conditions. For example, the Brazilian meat processing company JBS has promised to remove all companies that contribute to illegal deforestation from its supply chain by 2025. That is 5 years earlier than previously agreed. Pfizer continues to make progress in improving access to medicines.

In 2021, the BMO GAM voted on 125,146 resolutions at 12,416 (shareholder) meetings. In almost a quarter (23%) of the cases, the vote was against the board.

Claudia Wearmouth, Co-Head of Responsible Investment at BMO Global Asset Managementpart of Columbia Threadneedle Investments: “Due to the boom in attention to responsible investing, investors expect companies to score well within ESG. They do not hesitate to use their right to vote to create change. Still, there are concerns about greenwashing and whether companies are actually putting their money where their mouth is when it comes to executing their ESG ambitions. “

Wearmouth: “In the run-up to COP26, we saw a wave of ‘net zero’ promises from companies. We will continue to monitor closely whether these companies are actually taking steps to truly realize these long-term ambitions. We are keeping the pressure on their announced climate strategies, including achieving promised carbon reductions, capital utilization and governance. “

“Of course, we will continue our work in 2022 and expand our environmental agenda with more focus on biodiversity. We took the lead in establishing Nature Action 100, ”Wearmouth said. For example, last year BMO GAM spoke with companies about how they intend to bring their current environmental initiatives under the biodiversity umbrella. BMO GAM has meanwhile developed a proxy voting policy aimed at companies that affect biodiversity but do not provide sufficient information on this. With this, the asset manager wants to promote greater transparency and encourage accountability for biodiversity risks.

“Commitment to societal and societal issues remains high on the agenda, as we want the recovery from the pandemic to be as fair and equitable as possible.” The BMO encourages companies to include climate goals as part of the management structure and remuneration policy and to report in accordance with the recommendations of the Task Force on Climate-Related Financial Information (TCFD). “In addition, of course, we will continue to remind companies of their human rights obligations,” Wearmouth said.

Diversity remains a spearhead

Working conditions are also a spearhead in BMO GAM’s engagement activities. For example, the wealth manager is constantly striving for a living wage in the textile industry. Last year, the foundation also paid extra attention to the fact that companies took the necessary measures to protect their employees and customers from the corona virus, and that the remuneration of directors did not further increase inequality, which has often become painfully visible due to pandemics.

In 2021, BMO GAM also placed great emphasis on more diversity within companies. For example, the voting policy has been tightened up, and the chairman and members of the nomination committee or board of directors of the largest companies in the US, UK and Canada can count on a vote against if there is not at least one board member with a different ethnic background, and there are no mitigating circumstances. BMO GAM is in talks with 50 DAX-listed companies to increase the diversity within these companies and close the pay gap between men and women and people with different backgrounds. “

Share button

Leave a Comment