12 Oct 2020
In May 2020, 25 institutional investors representing around 2.2% of Italian electric utility Enel S.p.A.’s share capital filed a joint resolution at the AGM. As a member of the Climate Action 100+ investor group, Lyxor co-filed this resolution. This resolution was about an alternative list of candidates to the election of the Board of Directors, including notably a former wind power executive with specialised knowledge of climate issues. Following a very close vote between two lists, the one submitted by the minority shareholders – including Lyxor – obtained more than 51% of votes in favour. The nomination of this expert into Enel’s Board will help the company shift its strategy from fossil fuel energy to more sustainable solutions such as wind and solar power. Enel’s ambition is to be carbon neutral by 2050.
In June 2020, the first climate-related shareholder proposal to be put to a vote in Japan was approved by over one third of the votes cast – including Lyxor’s – at the AGM of Mizuho Financial Group, Japan’s third largest bank by assets. The resolution called for Mizuho to insert a provision in its articles of incorporation setting forth its commitment to disclose a plan on aligning its investments with the Paris Agreement goals. This was the first time that Lyxor used its vote, and voted in favour of a climate-related resolution in Japan.
At Total SE’s AGM in May 2020, a group of 11 European investors representing 1.35% of the share capital filed a climate resolution aiming to amend Total’s bylaws, to align its business model with Paris Agreement goals. The resolution called for a medium and long-term action plan, with detailed explanations on how Total intends to reduce its absolute greenhouse gas emissions, including indirect ‘Scope 3’ emissions. Considering Total’s publication of its “climate ambition” a few weeks before the AGM, Lyxor preferred to abstain on this resolution because of Total’s efforts with the Climate Action 100+ initiative. It was also important for all stakeholders to consider the potential risks associated with incorporating specific climate targets in the bylaws, from a financial, as well as legal aspect. Although the resolution only obtained 17% of votes in favour, it sent a clear signal to Total’s Board of Directors.
In 2020, Lyxor launched three additional commitment campaigns focused on environmental issues. Lasting three years, the goal of these campaigns is to study their impact on the evaluated companies’ sustainable development and integration of climate-related issues
Targeting sectors with significant water dependency such as beverages, chemicals, energy and mining, this campaign is focused on around 20 companies which rely on two rivers associated with their business operations: the Tietê river in Brazil, and the Vaal river in South Africa. They will be analysed based on six criteria: Water governance, Water risk and opportunity management, Water quantity, Water quality, Integrated water resources management, and Public water management.
For this campaign, 20 companies from the automotive, electronics and packaging & consumer goods sectors will be assessed on their contribution to a circular economy based on six KPIs: Governance and reporting, Risk and impact assessment and mitigation, Input in the production process and utility during use, Recycling practices and after-use, Innovation, and Stakeholder cooperation.
In line with its primary thematic engagement on climate change, this ongoing initiative is focused on climate-friendly technologies and systems. More details will follow, so please stay tuned.