Proxy voting and company engagement Q1 2023
4 minutes reading time
Across Betashares’ range of ethical and impact ETFs1, we voted at 30 shareholder meetings in the quarter ending 31 March 2023 on 602 individual proposals. We voted FOR 468 times, AGAINST 121 times, and ABSTAIN 13 times.
We voted WITH management 460 times and AGAINST management 142 times.
Among the votes, we supported a shareholder resolution at Apple Inc. in favour of a report on median gender and racial pay gap statistics, as these statistics would allow shareholders to compare and measure the progress of the company’s diversity and inclusion initiatives.
We also supported a resolution at Walgreens Boots Alliance, Inc. in favour of a report on public health costs due to tobacco product sales, as shareholders would benefit from increased disclosure regarding the firm’s policies and practices related to the sale of tobacco products and its risk and oversight mechanisms for continued in-store tobacco sales.
Engagement activity2 over the quarter tended to focus on human rights and governance. Forced labour and the payment of a living wage were issues that we engaged on, and we also contacted one company on best practices regarding related party transactions.
We engaged with companies in the fashion industry regarding commitments to pay workers a living wage and to have democratically elected worker representation across supply chains. A 2021 study by Oxfam3 and a more recent study by Aberdeen University and advocacy group Transform Trade indicates fashion brands are not living up to publicly-made past commitments on pay and workers’ rights4. We wrote to Fast Retailing (UNIQLO), H&M and Zalando, requesting greater transparency for investors on living wages and the steps being taken to ensure all workers receive a living wage.
We engaged with Canadian Solar to understand how it is addressing concerns regarding the use of forced labour within its operations and supply chains. Canadian Solar has supplied 8,000 solar modules for a project currently under construction in Maine, which may have been produced by the forced labour of Uyghur people in the Xinjiang region of China5. Shareholder Association for Research and Advocacy, a non-profit that advocates for responsible corporate behaviour, contacted Canadian Solar in November 2021 and asked the company to allow a third-party human rights audit of its supply chain. In May 2022, the Board of Canadian Solar passed a resolution mandating a third-party assessment of the extent to which Canadian Solar’s policies and procedures to effectively protect against forced labour in its operations, supply chains, and business relationships.
We engaged with Goodman Group to express our concerns with certain related party transactions. The Goodman Group disclosed that the company had invested in businesses that were beneficially owned and controlled by Christopher Green, a Goodman Group director. We wrote to Goodman to express our concern at these related party transactions and noted the recommendation in the ASX Corporate Governance Principles and Recommendations that “all directors…not take advantage of their position or the opportunities arising therefrom for personal gain”. We also voted AGAINST Mr Green’s reappointment to the Goodman Group board at its 2022 Annual General Meeting.
We engaged with Apple Inc. to understand its process for reviewing and restricting apps that were facilitating modern slavery. Press reports claimed that Apple hosts an app that allegedly facilitates the exploitation of auctioned migrant workers6. In Saudi Arabia, the app, Haraj, is still available on the App Store, despite being criticised by the UN’s Special Rapporteurs in 2020 for facilitating modern slavery. Apple said that it strictly prohibits the solicitation or promotion of illegal behaviour, including human trafficking and child exploitation, in the App Store and across every part of its business7.
Betashares Capital Ltd (ABN 78 139 566 868 AFS Licence 341181) is the issuer of the Betashares funds. Read the Target Market Determination and PDS at www. betashares.com.au and consider with your financial adviser whether the product is appropriate for your circumstances. The value of the units may go down as well as up. The Fund should only be considered as a component of a diversified portfolio.
2. Engagement activity relates to the ethical and impact ETFs noted above, as well as Betashares Sustainability Leaders Diversified Bond ETF – Currency Hedged (ASX: GBND).
Ex Suncorp, Russell Investments, QIC and Mercer. Past Director of the Investment Management Consultants Institute (IMCA) and Management Committee of the Investor Group on Climate Change (IGCC)Read more from Greg.