Each year AP7 votes at over 4000 company meetings. During the 2023 AGM season, AP7 will place extra focus on holding the Board of Directors accountable for delivering credible climate transition plans.
According to the International Energy Agency, IEA, greenhouse gas emissions must be halved by 2030 on the path to net zero emissions by 2050. That means that the current pace of climate transition needs to accelerate, with significant reductions in emissions and increased investment in renewable energy.
It is therefore of critical importance that the companies with the most significant climate change emissions have set credible and ambitious short- and medium-term emission reduction targets.
AP7 votes in support of the majority of proposals to improve climate strategies and reporting each year. In 2022 AP7’s voting policy was tightened for companies targeted in the CA100+, the initiative targeting the world’s largest corporate greenhouse gas emitters. The policy was also tightened for companies which significantly underperformed according to the Transition Pathway Initiative (TPI) Management Quality score, evaluating the quality of companies’ management of their risks and opportunities related to the low-carbon transition.
In 2023 we have further strengthened our expectations and will vote against core agenda items at high emitting companies which are not showing sufficient progress towards the climate transition.
We have analysed the full equity portfolio and identified emissions-intensive companies which lag behind their peers in taking the necessary steps towards a net zero emissions pathway. Unless significant and credible evidence of improvement becomes clear ahead of the AGM, we will mark our dissatisfaction by a vote against the most relevant board member or against approval of the financial statements at the company.
This voting addresses:
- Companies lacking the fundamentals of good governance on climate change*
- Companies which, despite investor engagement, fail in their due diligence of climate lobbying activities**
- Companies which have not set credible medium term emission reduction target**
- Companies with high risk of deforestation in their supply chain which lack fundamental measures to manage this risk***
In addition, AP7 intends to support the ongoing investor engagement for Net Zero Accounting practices, whereby we will vote against auditors, accounts and board members at the companies where engagement has not yet resulted in sufficient progress.
AP7 is prevented by law from voting at Swedish company meetings. Given that Swedish holdings make up such a small part of the portfolio, we nonetheless vote at almost 99 percent of all general meetings.
* Based on Transition Pathway Initiative Management Quality scores. Encompasses fossil fuel companies with a score of 3 or lower, and companies in other sectors with a score or 2 or lower.
** Based on CA100+ Net Zero Benchmark data (underlying data on lobbying from InfluenceMap) indicators 3 and 7.
*** Based on data from FAIRR’s Protein Producer Index.