Proxy voting and company engagement Q2 2024

Across Betashares’ range of ethical and impact ETFs¹, in the quarter ending 30 June 2024, we voted at 254 shareholder meetings on 3,419 individual proposals. We voted FOR 2,658 times, AGAINST 623 times and withheld or abstained 138 times.

We voted WITH management 2,690 times and AGAINST management 729 times.

Among the proposals, we supported a proposal at American Express Company in favour of a report on climate lobbying. Such a report would enable shareholders to assess how the company is addressing any misalignments between its direct and indirect lobbying activities and its public commitments on net zero.

Engagement activity

Engagement activity over the quarter was focused on biodiversity, supply chain risks and executive remuneration issues.

The Responsible Investment Committee (RIC) engaged with The Home Depot, Inc. in relation to the updated 2024 Forestry Policy and Sustainable Forestry Report. This was released following previous shareholder action through proxy voting, demonstrating the demand among shareholders for further transparency on these topics. While releasing this report was a step in the right direction, the report did not address concerns around supply chain traceability and protection of Canadian Boreal forests. The engagement sought to better understand how Home Depot planned on managing these risks within its supply chain.

In its response, Home Depot indicated that it was taking a number of steps to improve the overall traceability of its wood supply chain, including enhancing wood survey processes and additional due diligence measures to verify sourcing, including audits. The RIC was satisfied with this response and will continue to monitor and engage with Home Depot to ensure that it continues to improve its responsible sourcing practices.

A report by the Australian Conservation Foundation (ACF) alleged that Suncorp, along with other Australian banks, had significant exposure to potential illegal deforestation in Queensland. The report claimed that more than 364,000 hectares of native vegetation cleared in Queensland from 2018 to 2020 had a significant impact on a listed threatened species or ecological community – and was done without federal approval, making it potentially illegal.

We wrote to Suncorp to seek clarification on their exposure and understand their approach to identify, assess, and mitigate risks arising from nature and biodiversity exposures. Suncorp responded and said that its sustainability team is currently focused on developing its climate framework and while it acknowledges the growing risk from a nature and biodiversity perspective, the company hasn’t developed any policy or framework around it. We will continue to engage with Suncorp and keep track of its progress towards developing a risk assessment framework for nature and biodiversity risks.

In 2024, ahead of Tesla’s Annual General Meeting we conducted a comprehensive review of Tesla’s remuneration report with a focus on the structure, size and performance metrics tied to Elon Musk’s executive compensation package. We engaged with Telsa’s investor relations team to express our concerns and gain a better understanding of the rationale behind this remuneration package. During our call, Tesla focused on highlighting that the package had been approved in 2018 and Elon had delivered on all his performance metrics over the past five years. We were not satisfied with the response as Telsa failed to address the size of the package and the large (~9%) shareholder dilution that would occur if the proposal were passed. We decided to vote against Elon Musk’s remuneration package.

Source:

1. Betashares Global Sustainability Leaders ETF (ASX: ETHI), Betashares Australian Sustainability Leaders ETF (ASX: FAIR) and Betashares Climate Change Innovation ETF (ASX: ERTH). ↑