More than 50 commitments to sustainability by companies despite COVID-19

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Publication: AGM engagement report: Momentum - 25 Years of Engagement

This report is in Dutch. For a discussion on the 2020 AGM-season and a summary of this report, view the AGM Engagement Webinar 2020 here (in English).

Every year the Association of Investors for Sustainable Development (VBDO) attends the shareholders meetings of the largest Dutch listed companies to obtain commitments on sustainable performance. The main achievements and agreements with these companies are contained in the AGM Engagement report which was published today. Among other things, this report show that 37 companies surveyed made 51 commitments in the area of ​​sustainability.  

A different setting has no effect on sustainability

Where normally hundreds of shareholders gather in a large room for the annual shareholders meeting (AGM), the seats remained empty this year. Often, the meeting was a webcast of the board, which answered questions submitted in advance.

“In 25 years of engagement we have never had an AVA season like 2020,” said Angélique Laskewitz, executive director of the VBDO. “On the one hand, it was very successful, and we received more commitments than expected. Except for a single company, we saw no delay in sustainability during COVID-19. On the other hand, it was a difficult season, where we couldn’t look the CEO in the eyes and only half of the companies were given the opportunity to be heard. ”

25 years of commitment: what has changed?

Laskewitz: “This report is called Momentum because, on the one hand, it is an anniversary for us, on the other hand it reflects the current changes in the world, such as COVID-19. Much has changed over the years. Twenty years ago, we asked questions about sustainability at shareholder meetings and we came away only with the recycling of paper; now sustainability needs to be addressed better, bigger and more pro-actively. One of the banks said that this year it will discuss with other banks how they can jointly devise solutions to protect customers from the physical consequences of climate change, and not simply pass costs down to the customer. That was of course unthinkable a quarter of a century ago.”

Three important themes

Every year, VBDO enters into dialogue with Dutch companies on various sustainability themes. This year specific questions were asked related to climate adaptation, working conditions in the supply chain and diversity. The report shows several important developments on these themes. For example, we see that companies not only share more CO2 data, but that the risks and opportunities related to climate change are actually included in the strategy; production companies in the technology and industrial sector will work on extra transparency about working conditions in the supply chain and we see that more than 10 companies will broaden their diversity policy in the coming year.

Awareness of climate change risks is growing

The report shows that reasonable progress has been made on this theme, even though the focus is mainly on climate mitigation and to a lesser extent on adaptation. All companies surveyed are focusing on the physical risks of climate change and a significant number are working with scenario analysis to identify the risks to the company when the earth warms by 4 degrees C. In particular, it is striking that companies still think in risks and not in possibilities.

Little transparency in the chain leads to a lack of concrete actions

The survey shows that almost all companies indicate that they want to improve working conditions in the supply chain, but that only 11 companies have actually investigated negative impacts in the chain. Only 7 of them have done something to solve problems. Most companies focus on direct suppliers and business partners but have little to no insight into the events and possible abuses in the deeper layers of the supply chain.

A policy alone does not lead to diverse and inclusive organizations

When it comes to diversity, most companies focus mainly on gender. Although the understanding and attention for this theme has grown enormously, it does not yet fully translate into practice: only 35% of the companies have drawn up a comprehensive diversity policy. Some sectors struggle more with attracting diverse talent than others: for example, heavy or technical work seems less attractive among women. All companies surveyed say they offer equal remuneration, but only 8 companies have investigated internally and published it externally. Some companies have only investigated it internally and subsequently found no pay gap. The idea then is that this does not have to be reported. Laskewitz adds, “Businesses should look beyond gender when it comes to diversity. The theme is much broader. In addition: writing a policy is different from implementing one. Employees and other stakeholders do not know whether there is a pay gap. Reporting on this can result in more diversity among prospective employees, because they see that fair treatment is taking place in terms of compensation. However, due to privacy legislation, it may not be allowed to frame the entire diversity profile of the organization and share it externally, but that does not mean that it can’t be used internally. Just look at Unilever, which is clearly a leader in this category. ” Unilever came out in March this year with a message that the distribution of leadership roles between men and women is now equally shared worldwide.

Follow-up or no follow-up

This year there was a clear dichotomy in how companies dealt with the digital possibilities and the COVID-19 crisis. About half of the companies gave shareholders the opportunity to digitally ask a follow-up question to previously submitted questions. The other half left it at the pre-submitted questions.  “Follow-up questioning is an essential part of engagement,” said Laskewitz. “This year we missed being physically present and in half the cases our follow-up question; follow-up questions are useful when the director dodges our question or does not answer specifically enough. The VBDO calls on the CEO’s of all companies to make this option digitally available next year. ”

All results of last year’s commitment to the three themes mentioned can be found in the report Momentum: 25 years of Engagement.