BNP Paribas Asset Management (BNPP AM) has continued to implement its strict voting policy during the 2024 Annual General Meeting (AGM) season. With an opposition rate across all resolutions of 36% (same as in 2023), this season illustrates BNPP AM’s consistent and ambitious approach, based on ongoing constructive dialogue with companies. Among the major topics of the 2024 season were: executive compensation, corporate governance and climate transition.
In 2024, BNPP AM opposed 2,163 management proposals across 332 companies for environmental and social reasons, 79% of which were related to climate or biodiversity-related expectations.
Michael Herskovich, Head of Voting and Corporate Governance at BNP Paribas Asset Management, comments:
"During this season, we have maintained a high rate of opposition on environmental and social issues and have seen improvements through engagement with investee companies. As a result of this process, we have been able to strengthen our expectations of the companies in which we are invested every year. We remain convinced that shareholder democracy is essential to encourage companies to improve their performance and transparency on topics related to sustainability."
BNPP AM now requires the integration of a climate component in executive compensation
Executive compensation remained the key subject of opposition this season, despite a significant improvement in transparency and practices. In 2024, BNPP AM opposed more than one in two resolutions related to executive compensation, mostly due to lack of transparency or unjustified exceptional compensation.
This year, BNPP AM specified its requirements related to the integration of environmental and social issues into executive remuneration. It expects companies to include a climate component in executives’ remuneration policies in some sectors (such as energy, utilities, industry and materials) and in companies identified in its investment portfolios as being among the higher greenhouse gas emitters. This requirement will be extended to all companies by 2026.
Integrating a climate component in compensation is an increasingly developed practice. However, to be efficient, these criteria must be measurable, quantifiable, and relevant to the company's sustainable development strategy.
Rachel Crossley, Head of Stewardship, Europe at BNP Paribas Asset Management, explains:
"Voting is a central fiduciary duty and core to BNPP AM's sustainability strategy. During the 2024 season we have reinforced our stance on combatting climate change, protecting nature, and promoting equality and inclusive growth. While climate criteria are increasingly being introduced to executive compensation plans in Europe, this is not the case in North America. Even in Europe, however, the criteria are often opaque and are not sufficiently quantified. We will continue to press for greater transparency and specificity on these and other sustainability metrics, that are science-based and tied to corporate strategy."
BNPP AM rejected 40% of director appointment resolutions, mainly due to diversity
Opposition to directors is often linked to weak corporate governance, a lack of effective checks and balances, or a failure to meet diversity expectations. From 2025, BNPP AM will increase the minimum threshold required for female board membership to 40% in Europe, North America, Australia, New Zealand and South Africa.
ESG remains a priority for BNPP AM's voting strategy
BNPP AM uses voting to promote good environmental, social and governance standards, which are an essential part of its corporate responsibility.
In line with its Net Zero roadmap, BNPP AM expects companies to set the ambition to achieve net-zero emissions by 2050 at the latest. In addition, the integration of biodiversity into voting activity requires companies to assess the impact of their activities and their dependence on nature. BNPP AM opposed more than 2,100 management proposals (in 3/4 of cases for reasons related to climate and biodiversity) compared to 1,521 resolutions in 2023.
BNPP AM remains committed to collaborative engagement
BNPP AM is part of more than 40 collective initiatives around the world. BNPP AM's participation in Climate Action 100+ and Nature Action 100 has been strengthened by it taking on formal roles in the steering committee of each of these organisations. These appointments reflect BNPP AM’s commitment towards participating in collaborative engagement to manage systemic risks.
Key figures for 2024:
Of the 1,645 general meetings:
- At 1,492 general meetings (90%), BNPP AM voted against or abstained on at least one resolution (compared to 86% in 2023)
- Of the 23,653 resolutions voted, 22,735 resolutions were proposed by the companies and 918 were shareholders resolutions.
- 12 shareholder resolutions were filed by BNPP AM in 2024: 7 on governance in Italy and 5 environmental resolutions1 in the United States.
- Within the scope of the most emitting companies subject BNPP AM’s requirement of including a climate criterion in executive compensation, BNPP AM opposed 127 compensation-related resolutions due to the lack of criteria - 74% of these resolutions relate to companies listed in North America.
For more information, please refer to BNP Paribas Asset Management's voting policy.
Footnotes
- ^ Deforestation and biodiversity
