Voting Study: Do German investors stand up for climate protection?

Should large listed companies like Shell, Total or Rio Tinto aim for stricter targets for greenhouse gas emissions? Should they at least disclose their entire CO2 emissions? Should Amazon and Chevron check at which points in their economic activities there is a risk of human rights being violated?

With resolutions at annual general meetings, investors have the opportunity to push the business activities of companies to a more ecological and social approach. The Dutch agency Profundo analysed the voting behaviour of six large German investors on behalf of Fair Finance International: Did they use their voting rights in the interest of climate protection and human rights due diligence? Or did their vote counteract the goals of transforming the economy towards sustainability?

All the German investors surveyed scored as “followers”, with Allianz in the lead with 7.7 out of 10 points possible, closely followed by Deutsche Bank. The other financial institutions included in the Fair Finance Guide Germany, Axa, R+V and Alte Leipziger, scored between 5.6 and 6.6. For Deka, there were not enough voting results for an evaluation.

Of 43 ESG-related resolutions examined, 28 deal with climate protection, of which at least three achieved a narrow majority. Even if the remaining 25 climate-related motions and the other 15 – those related to social, human rights and other sustainability aspects – failed, filing a shareholder resolution remains a promising approach to put investor pressure on companies, with the ultimate goal of a more sustainable economy.

As voting results are publicly visible, major shareholders need to show their true colours. Their promises of mitigating climate change and respecting social standards must be reflected in their voting behaviour. Then again, supporting a shareholder resolution at an AGM is an action in terms of sustainable goals that is easily implemented. Investors should not let this opportunity pass. We call on institutional investors to also file resolutions themselves that bring climate protection, human rights and ecology to the table. Facing Finance expects the German government, in line with Recommendation 31 of the Sustainable Finance Committee, to “create a reliable legal basis for collaborative ESG engagement” in order to give investors in Germany better opportunities to hold companies accountable regarding a social-ecological transformation of the economy.

Read the entire report here.