BNP Paribas Asset Management (BNPP AM) announced its 2023 AGM season voting record, revealing that it rejected more than half of corporate climate strategy – or “Say on Climate” – resolutions, and opposed nearly half of director appointments, primarily for diversity reasons.

Say on Climate resolutions are typically non-binding advisory votes on company’s climate transition plans. BNP Paribas AM said that it noted a sharp decline in the number of climate  resolutions in the 2023 AGM season, and said that it voted against 53% of the plans, with a focus on Scope 3 emissions. The firm’s voting policy takes into consideration several factors when assessing Say on Climate resolutions, including whether the company discloses all relevant emissions across Scopes 1, 2 and 3, sets an ambition to reach net zero by 2050, as well as short- and medium-term targets that address the most relevant emission scopes, and report in line with TCFD standards on climate governance, strategy, risk management and metrics, and targets.

BNP Paribas AM also said that it rejected 48% of director appointment resolutions, with most due to companies missing the firm’s voting policy’s board diversity targets, including a requirement for 35% female representation in Europe and North America, and 20% in Latin America, Asia and the Middle East. The company said that it opposed the election of all male directors at companies that did not meet its thresholds.

Additionally, the firm said that it rejected 55% of executive compensation resolutions, noting that while it has seen an improvement in the transparency and integration of ESG performance criteria, it continues to see variable remuneration without performance requirements and “an excessive catch-up effect compared to 2022,” which was affected by the pandemic. Under BNP Paribas AM’s voting policy, the firm will not vote for compensation practices that have executive remuneration schemes disproportionate to median employee pay, misaligned with performance or allowing “pay-for-failure,” or that do not include ESG performance criteria.

BNP Paribas AM added that it rejected more than 1,000 resolutions overall for reasons including a lack of credible decarbonization strategies and intermediate targets, and failure of companies to assess and report on their main impacts and dependencies on nature, particularly on water and deforestation issues.

Michael Herskovich, Head of Voting and Governance at BNP Paribas Asset Management, said:

“In the first half of the year, BNPP AM voted at more than 1,600 AGMs worldwide.  Voting is an important component of our dialogue with the companies in which we invest on behalf of our clients, as well as being an integral part of our investment management processes.”