Talking Heads – Stentmastery with Michael Herskovich
Daniel Morris: Hello and welcome to the podcast of BNP Paribas Asset Management Talking Heads. Every week talking heads will bring you in -depth insights and analysis through the lens of sustainability on the topics that are really important for investors. In this episode we discuss the steward. I am Daniel Morris, main market strategist, and I joined today by Michael Herskovich, worldwide head of stewardship. Welcome, Michael, and thanks for it with me.
Michael Herskovich: Thank you, Daniel, and excited to be there and discuss my work in stewardship.
DM: Let’s start with the discussion about the annual general meetings we have had this year. But before we discuss some of the things you saw in the meetings, you might remind our listeners why voices is an important part of the stewardship strategy for long -term investor.
MH: Perhaps it is important to define stewardship. When you are an investor, you have the right to vote for general meetings to approve the election of directors who will set up the strategy of the company, to approve other items such as compensation or financial activities. Voting is an important part because it enables investors to directly influence the approach, strategy and behavior of their indirect company and indirectly too indirectly. If you are not satisfied with the direction of a company, you can express that by voting against a proposal or by trying to change their first proposal. Our ultimate goal is to have a proposal vote, but that is a direct influence that we can use, and we do not hesitate to use that tool.
DM: That’s very handy, Michael. Perhaps you can share some of the most important collection restaurants with our parts of the most recent voting season.
MH: We have already passed 75 to 80% of the general meeting season. For BNP Paribas Asset Management we have voted almost 1,700 general meetings. What we have observed is a form of consistency and continuity. As I said, we don’t hesitate to use these voting rights. We were against 35%, so almost 1/3, of the proposals that were a voice that is comparable as 2024. About gender diversity in 2025 we increased our expectations and now ask 40% of gender representation [on the board} versus 35% before. Our policy is to push companies to progress on such topics. And we can see that it’s working. The other element that I can share regarding this year is we are still seeing remuneration being the highest proposal where we opposed – more than half of the proposals.
DM: ESG, or environmental, social and governance themes and topics, have been very much in the news this year. Can you tell us what trends you observed on the questions of environment and social?
MH: 99% of proposals that are on ballots are related to governance. That’s always been the case. The environmental and social proposals have always been a minority. Most of those are coming from shareholders, often from North America where you have the regulation that allows shareholders easily to file a proposal. What we have seen this year is a reduction of those proposal compared to last year, a 30% reduction overall. In Europe, it was mostly through management proposals that are called say on climate. It’s a small portion of a vote. Nevertheless, it’s a part that is really important. We’ve not supported 100% of them, but we have high mark with 97% of support on social-related proposal, 95% of climate-related proposal. It’s something that is important to support when we think it would be beneficial for the long-term performance of the company and can help the company improve their sustainability practises. So, if we’re unhappy regarding the climate change strategy of a company, if we have an issue regarding the disclosure of CO2 or forest and water data, we use regular governance proposals to express our concern.
DM: Engagement is a key part of your role. What are the priority topics that will be addressed with issuers and public policymakers for the rest of the year?
MH: For the summer and until the end of the year, we can address the other topics that we want to prioritise. We have what we call the three ES on our sustainability strategy: energy transition, equality and ecosystem, making sure that we tackle the companies that are the most relevant to tackle with those sustainability thematics. We also make sure that we address new trends and new thematics such as AI.
There is an intense discussion all around the world regarding sustainability finance regulation in Europe, what is called CSRD, which is a regulation to corporate disclosure on sustainability topics. It’s an important part of our work to engage with public policymakers and make sure that on the simplification work that the EU Commission has started, that is done in the right way, in a smart way. We’re not against simplification. We just want to make sure that we’ll have a good regulation for us and the markets we operate in.
DM: If I could summarise some of the key points that you made, you highlighted how important voting really is, how important it really should be for any long-term investor. When you talked about the trends that you observed in this year’s annual meetings, you noted on one hand that there were fewer environmental and social proposals compared to last year, but nonetheless they garnered a high degree of support. And you talked about what your focus is going to be through the rest of the year. You highlighted energy transition, equality and healthy ecosystems. Well, Michael, thank you very much for joining me.
MH: It was a pleasure.
DM: That’s it for this week’s episode of Talking Heads. If you would like to learn more about our stewardship strategy, please reach out to your BNP Paribas Asset Management contact or check out Viewpoint, our website for investment insights at viewpoint.bnpparibas-am.com. Viewpoint brings commentary and analysis in a variety of formats, from investment outlooks to asset allocation videos and podcasts to help investors make better informed decisions. You’ve been listening to the BNP Paribas Asset Management Talking Heads podcast with me, Daniel Morris, and Michael Herskovich, Global Head of Stewardship. Please do join me next week. Until then, take care.
#Talking #heads #Combining #power #possession #stewardship