Like all private pensions, our plans invest in various companies around the world. The large amount of money invested in pensions means they have the collective power and potential to change the world for the better. In past years, investors in funds like the ones offered by PensionBee would have to vote in the same way as their asset managers. However, in 2023 we changed our approach to voting at company Annual General Meetings (AGMs). We survey our customers to understand what matters to them and how they’d like us to vote on their behalf. Though our customers can’t currently vote directly at the AGMs of the companies their pensions are invested in, we can vote in line with their views on their behalf. We’re able to vote this way using ‘Voting Choice’. Voting Choice is currently active in three of our plans, Tailored, Tracker and 4Plus. Together, these represent about 85% of our asset base.
Socially Responsible Investment (SRI) guidelines
We’re able to follow a voting policy of our choice. We’ve selected the Institutional Shareholder Services’ (ISS) Socially Responsible Investment (SRI) voting guidelines. This is the voting policy we think best reflects our customers’ views.
This policy included a set of proxy voting guidelines consistent with the two key objectives of socially responsible investors; financial and social. These show that like other investors, they’re looking to make a return on their investments but also expect the companies to behave ethically. These investors want companies to make a positive social and environmental impact.
2024 Voting Choice survey results
We seek our customers’ views throughout the year on a wide range of topics. In February 2024, we surveyed customers in the three Voting Choice plans, Tailored, Tracker and 4Plus. We asked our customers in these plans what issues concerned them most and what their priorities are on environmental, social and governmental (ESG) issues. As in 2023, the 2024 survey showed customers’ top ESG priority was ensuring that people are paid in line with the cost of living. Other top ESG priorities included issues on companies avoiding paying taxes and the impact of climate change.
The majority of customers surveyed also responded positively to a new question introduced in 2024. They said that shareholder resolutions and AGMs are the best methods by which to hold companies to account. They’re also a good way to express their dissatisfaction to the companies’ management teams. Our customers wanted us to remind management teams of their wider social and economic responsibilities. This means AGMs should be used to vote against directors who don’t properly manage these risks.
AGM voting examples
We also presented customers with real shareholder resolutions and asked them how they’d vote in each scenario. This was another way to help ensure the SRI voting policy best reflects customers’ views. A few of the scenarios are given below.
Walmart
Shareholders asked Walmart to provide workers with a living wage. In the US this is currently $25.02 per hour per worker. This is the minimum salary necessary to meet a family’s basic needs. The company’s management recommended voting against this increase. In contrast, our survey showed that 83% of our customers would have voted to increase employee hourly pay in line with the US living wage.
Read more about shareholder resolution results at Walmart
Shell Energy
Shareholders asked Shell Energy to align its existing 2030 target for the reduction of greenhouse gases to the goals of the Paris Climate Agreement. These goals include limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C. 74% of customers in our survey said they would have voted in favour of this resolution. This compares with 80% of Shell’s shareholders who voted against it at the AGM.
Read more about shareholder resolution results at Shell Energy
McDonald’s
McDonald’s had previously committed to reducing its use of antibiotics in all the beef it sells in its restaurants in 2018. Recently, it dropped its commitment to reduction targets completely.
Shareholders have asked McDonald’s to comply with the World Health Organization (WHO) guidelines on food-producing animals throughout its supply chains. The official result showed that 82% of shareholders voted against this proposed resolution. However, 88% of our surveyed customers said they would have voted for McDonald’s to comply with the WHO’s guidelines.
Read more about shareholder resolution results at McDonald’s
The key finding from the scenarios presented was that our SRI voting policy is broadly in line with our customers’ views. In each scenario, the way our customers said they would vote was reflected in the chosen voting policy. It supports shareholder resolutions and voting against management recommendations in most cases.
Continuing to listen to customer feedback
Overall, our survey showed our customers believe PensionBee is a positive voice in the investment landscape. It showed our SRI voting policy continues to reflect how most of the respondents in the Tailored, Tracker and 4Plus want us to hold companies accountable for their actions.
We’re thankful for our customers taking the time to share their thoughts with us. These are invaluable in helping us maintain a voting policy that aligns with the views of those invested in one of our Voting Choice plans.
“I like this approach, it’s unusual for pension savers to be consulted in this way and it’s important we act responsibly.”
“I appreciate this survey and the opportunity to share my opinions in this way. I’m delighted that PensionBee is concerned about using its powers to help climate change, workers’ rights, etc.”
We’ll continue advocating for sustainable and responsible practices within corporations. So far in 2024, we’ve worked with asset managers to raise awareness of voting issues related to health, climate and shareholder democracy. We’ll continue working with plans’ asset managers to expand Voting Choice across our remaining plans.
We’d like to continue encouraging our customers to share their thoughts and suggestions on voting and our approach to ESG by emailing [email protected].
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
