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The latest Investor demands ahead of 2023 AGMs

Environmental concerns remain a hot topic in the annual 'Dear Chairperson' letters from Aviva and LAPF Forum, with the IA's IVIS turning up the heat on gender diversity.

Aviva

Aviva's annual 'Dear Chairperson' letter issued last week outlined three priorities: 

  • addressing the cost-of living crisis, with a focus on fairness for employees, suppliers and customers rather than investor returns;
  • transitioning to a low-carbon economy in a socially just and inclusive manner, with strong support for the UK's proposed Transition Plan Disclosure Framework, especially around business models, financial planning, incentives and remuneration, engagement with value chain and engagement with governments, regulators and society both in terms of alignment with national climate goals and in terms of lobbying; and
  • reversing nature loss, encouraging companies to carry out a business model assessment in preparation for the Taskforce on Nature-related Financial Disclosures (TNFD) framework.

Aviva Investors’ 2023 stewardship priorities - Aviva Investors

LAPF Forum

Another group of investors (the LAPF Forum) have also issued their 'Dear Chairperson' letter repeating their 2022 call for all companies to table a 'Say on Climate' vote, urging all companies to disclose their transition plans and allow investors to vote on the strategy and any associated capital expenditure requirements. 2023-Say-on-Climate-press-release.pdf (lapfforum.org)

Investment Association

The Investment Association (IA) has published a statement on its Shareholder Priorities for 2023 setting out the expectations of investors in listed companies for 2023 and also IVIS's traffic light approach for upcoming AGMs, with the following four key areas of focus:

  • Gender Diversity – IVIS is increasing its diversity targets for FTSE 350 companies in 2023 and will:
    • red-top FTSE 350 companies where women represent 35% or less of the Board, or 30% or less of the Executive Committee and their direct reports; and
    • red-top FTSE Small Cap companies where women represent 25% or less of the Board, or 25% or less of the Executive Committee.
  • Stakeholder engagement – The IA expects companies to extend their focus to the cost-of-living crisis, with company disclosures addressing the impact of the increases in the cost of living and inflationary pressures on employees, consumers and suppliers.

  • Climate change – IVIS will continue to amber-top companies failing to disclosure against all four pillars of the TCFD Recommendations, and will also monitor whether directors considered transition risks when preparing and signing off on the company accounts.

Published 17 February, 2023