Franco-Swiss alliance to scrutinise corporate climate plans ahead of AGM season
Swiss and French investors are casting a critical eye on corporate stewardship reports in a bit to enhance accountability ahead of the 2024 AGM season, Ethos Foundation revealed
Ethos, foundation which acts as a stewardship body for Swiss 251 pension funds managing a combined CHF350bn (£312bn) in assets had joined forces with French institutions ADEME, the French association FIR and the WBA to assess the credibility of European companies’ climate plans.
The collaboration builds on the Climate Transition Ratings launched by Ethos in 2023. This new methodology is partly based on the ACT ("Assessing Low-Carbon Transition") methodology, developed in 2015 by ADEME, a French government-backed energy transition agency.
As part of the new partnership, the stewardship bodies plan to extend these energy transition ratings across all listed European companies.
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"It is essential for shareholders to be able to rely on robust evaluation systems that allow them to assess the credibility of the climate strategies implemented by companies” said Vincent Kaufmann, CEO of the Ethos Foundation. “Thanks to this partnership, we will have an effective tool with which to assess the relevance of the climate plans submitted to shareholders for approval” he added.
Roche AGM -Ethos in action
An example of how these transition ratings could be put into action is the Roche AGM on 12 March. Ethos has declared in advance of the shareholder meeting that it intends to oppose the pharmaceutical giant’s Sustainability Plan, arguing that the climate strategy was “insufficient.”
Ethos flagged that Roche has not yet presented scientifically validated targets for reducing its greenhouse gas (GHG) emissions that are compatible with a scenario of 1.5°C warming and that the plan had not been verified by an independent auditor.
To add further weight to its assessment, Ethos recommends opposing all agenda items relating to remuneration.
It remains to be seen how much weight the recommendation will carry, the biggest shareholders in Roche are private banks and international fund managers. On average, Swiss pension funds tend to hold about a third of their assets in stocks, according to Swisscanto’s 2023 asset allocation survey.
