Latest Stewardship Activity: November


This is a great achievement and reflects the hard work and leadership that we have been able to show in this space.

Market Developments

SEC on shareholder proposals and proxy advisors

In the US the Securities and Exchange Commission (SEC) has voted to propose changes to the governance around the inclusion of shareholder proposals in company proxy statements. The proposal increases the time that shares must be held from one to three years and increases the hurdle of votes in favour before allowing a proposal to be refiled. This proposal is aimed at a small group of shareholders who put forward a large percentage of these proposals – often on non-material items. These active shareholders were referred to as the ‘gad-flies’; however this proposal would reduce shareholder rights.

A second proposal concerns the proxy advisors where the SEC is looking to introduce more oversight from the companies of the recommendations made – introducing a 25-day period of review for companies to identify errors in the proxy advice for an AGM. This has generated a large amount of criticism from the investment community and is a ‘win’ for corporate America if it goes through as it stands. One of the proxy advisors that we use, Institutional Shareholder Services (ISS), has also reacted furiously and has filed a lawsuit against the SEC challenging interpretation and guidance put forth by the Commission that applies the proxy solicitation rules to the provision of proxy advice.

PRI Active Ownership 2.0

In synch with the focus on outcomes in the newly released Stewardship Code in the UK, the PRI has launched a new guide entitled Active Ownership 2.0. This focuses on collaborative engagement and the power this potentially has to address some of the systemic issues. For example, highlighting Climate Action 100+ (CA100+) which is one of the largest ever collaborative engagements and is focused on the sectors which are the biggest carbon emitters. Once again, it focuses on the outcomes rather than policy and process and emphasises the need for the investment community to work together when looking to address systemic issues.

US Federal Reserve and Network for Greening the Financial System

Climate change remains front and centre for many investors, but the US continues to follow a different path with confirmation this month that the US wants to pull out of the Paris Agreement of 2015. They have given notice as expected but cannot officially leave until next November at the time of the 2020 presidential election.

Interestingly, however, the US Federal Reserve (Fed) revealed in a recent speech that it is in discussions about how it might participate in the Central Banks and Supervisors Network for Greening the Financial System (NGFS) ‘in order to learn from our international colleagues’ approaches to measuring and managing climate risks in the financial system’. The Fed has been notable for its absence in the NGFS and if the talks proceed it will be a major boost for the network.

Japan – screening of investors

In Japan, the government has recently announced plans to conduct national security screening of foreign investors who want to hold more than 1% of company shares. The Ministry of Finance said the proposed restrictions aimed to prevent ‘leakage of information on critical technologies and disposition of business activities for national security reasons’. Affected sectors look likely to include aerospace, weapons, nuclear power, transport and space development – as well as telecoms, software, ICT, and leather goods. The changes would mean that investors wishing to hold more than 1% of shares in Japanese firms in ‘designated sectors’ could soon have to give prior notification of their buying intentions, unless they choose to forgo the right to take board seats or file resolutions; 1% is a very low threshold for this.

Martin Currie

ICGN Global Stewardship Award – win

We were nominated for the ICGN Global Stewardship Award shortlist this autumn and we are delighted to have subsequently won this at the end of November. This is a great achievement and reflects the hard work and leadership that we have been able to show in this space. The award was based on our disclosure and, in particular, our stewardship annual report.


The independent judges noted the broad scope of the reporting, the clear use of examples across a wide range of topics and geographies and the use of graphics to bring the report to life. This is a prestigious award to have won and is a good base from which to continue to build our credentials.

Stewardship Committee

I have recently been appointed to the Stewardship Committee at the Investment Association (IA), a body that represents more than US$10 trillion of assets under management run for clients in the UK and around the world. This committee sits alongside the Sustainability Committee, of which I am also a member, with the remit to set out the priorities for the IA as regards stewardship – notably some of the key issues that are evolving in the market. In addition, it provides sight of upcoming legislation which, given the rapid pace of development, is extremely useful.

Publication on ESG integration in GLTU

Ahead of series of meetings in Japan, Martin Currie’s Head of Global Long-Term Unconstrained (GLTU) Zehrid Osmani has written a white paper looking at the integration of ESG in the GLTU strategy and the ratings used in making the risk assessments for companies invested in. The considerable work that has been put into ESG ratings across the teams plays a really helpful role in capturing our analysis and also informing our engagement agenda which effectively sits between and informs these two elements as part of the process.

More broadly, on our messaging of Stewardship and ESG, our focus on materiality and active ownership has been a consistent theme. Our focus on materiality is driven by the realities of what will influence business returns – a short rather than long list of relevant factors – and is supported by research from which we have also cited in our presentations.

Our focus on active ownership reflects the direction that stewardship is heading – with more focus on outcomes – and where we are already demonstrating industry leadership.


During the past month, we have had a number of engagements with companies across portfolios. Our Asian team spent time with an Australian mining explosives business, with a particular focus on the material ESG issues that touch on the group. This included people with a focus on health and safety and leadership and talent retention where there is particular attention on the development of a diverse future management pipeline. We also talked about its approach to managing climate-change impacts and the challenges presented by the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations which will progressively guide its future climate-related disclosures. In addition, we touched on water consumption and waste generation, with the company noting the benefits it is gaining from implementing SAP.

In the US, we were pleased to see changes coming through at the branded sports firm Nike, for whom a key opportunity is its female client base. In 2018, issues with workplace behaviours were identified as the catalyst for resetting workplace culture, and the vice president of diversity and inclusion subsequently left the company. We have been engaging with the company on this and we have seen significant work on diversity and inclusion, unconscious bias training, employee representation and laying out a new leadership program.

In Australia, we have been engaging with a number of boards over the course of the last couple of months. One we highlighted recently was a meeting with building and construction materials producer Boral. In this case we noted that the group has been expanding the skill-set and experience of the board looking to add Asian expertise, as the business evolves. However, the CEO of the group has also been serving on the Sims Metals board and investors had expressed concerns of the commitment as a sitting CEO and, as such, it has been announced that he will not seek reelection for this external position.

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