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11-03-2022 13:40

Active ownership in practice: Nordea votes at more than 4,200 annual general meetings

Being an active owner is a central part of Nordea’s work with sustainability and good ESG practices, and in 2021 we voted at around 95% of all annual general meetings where we could vote.
Raised hands

Voting at annual general meetings (AGMs) is one of the most important tools an active asset manager like Nordea has to influence companies and promote change. Lately Nordea has become significantly more active at the voting buttons.

“At the end of 2020 we introduced the Voting 2.0 project which aims to increase our voting performance significantly over the coming two years. In 2021 we voted at some 95% of all AGMs where we could vote. This means that we have voted on more or less every ESG proposal in the companies we have invested in,” explains Erik Durhan, head of Nordea Fund’s team for corporate governance.

In practice this means that Nordea Funds voted at more than 4,200 AGMs during the year compared to around 700 in 2020, and our efforts are being recognised. Recently ShareAction, a non-profit organisation, published the report ”Voting Matters”, where Nordea’s corporate governance efforts rank at the top among 65 of the largest asset managers in the world. 


What is corporate governance?

Corporate governance deals with the relationship between shareholders and the boards and executive management of companies. The purpose is to ensure a good, long-term development in the companies we invest in as asset managers.

We ensure this, for example, when as shareholders in companies we exercise our voting rights at AGMs. All shareholders have the right to attend and vote at an AGM. A shareholder who cannot physically attend the AGM can exercise its rights via so-called proxy voting, which we at Nordea often use when voting at AGMs outside the Nordic countries.

Corporate governance is also about participating in nomination committees when board members are to be appointed. Nordea Funds is represented in more than 50 nomination committees and thus has great influence on who are proposed as new board members in a company.

Strong focus on environmental issues

It is especially within the area of environmental resolutions that Nordea’s efforts stand out because we have voted on all proposals where we could vote.

For example, Nordea voted for the Norwegian oil company Equinor to introduce short-, medium- and long-term CO2 emissions goals and for H&M to report its sustainability goals linked to variable remuneration for senior executives. Moreover, Nordea also voted for the big US oil company ExxonMobil to report how the company's lobbyism is directly and indirectly in line with the goals set out in the Paris Agreement. That proposal was also adopted at the AGM.

The report compares how asset managers that – like Nordea Asset Management – are signatories to the Net Zero Asset Management Initiative (NZAM) and Climate Action 100+ voted on environmental issues.

NZAM is an initiative signed by many of the largest asset managers in the world that have committed to reaching net zero emissions for their total investment portfolio in the future. Climate Action 100+ is an initiative where several asset managers have joined forces to influence the world’s 100 largest corporate greenhouse gas emitters.

Nordea's voting performance stands out compared to the average levels for the signatories to both the NZAM and Climate Action 100+ initiatives. The report claims that more large asset managers should become better at exercising their shareholder rights and using their voting right to influence companies.

Nordea has extensive experience within corporate governance, but it requires a great deal as it can be difficult to gain insight into the circumstances of the several thousand companies that Nordea's funds invest in.

“To create a structure for how we should address the matters presented to us, we use our own corporate governance principles as a guideline. In our principles we have particular focus on ESG issues, but we also have a strong focus on matters relating to companies’ capital structure, for example when a company wants to issue new shares or get a share buyback mandate,” Erik Durhan explains and adds:

“We have extensive experience in working with these issues and we also take the time to engage with companies to understand their challenges and often we can help them with the proposals they want to present at their AGMs. In this respect we are also in close dialogue with Nordea’s team for responsible investment.”

Nordea and Credit Suisse made most progress during the year

The report also compared to which extent asset managers voted “for” ESG proposals. This is a good indication of the performance of asset managers as active owners as these proposals are often presented by external parties who require more from the companies in terms of making changes. Nordea and Credit Suisse have increased their share of “for” votes the most during the year and Nordea voted “for” in more than 90% of the proposals.

“We will continue our efforts and improve our process during 2022 to hopefully become even better. It's important for us that we make our voting decisions based on our own tailored voting policy and our own analyses – especially in more complex cases. We want to reduce our use of recommendations from external suppliers and instead vote based on our own analyses,” Erik Durhan concludes.

On Nordea’s voting page you can see how Nordea voted at AGMs across the world and sectors.

Read more about Nordea Fund’s corporate governance principles

About ShareAction

ShareAction is a non-profit organisation working to build a global investment sector that takes responsibility for its impacts on people and planet. ShareAction mobilises investors to take action to improve labour standards, tackle the climate crisis, and address pressing global health issues.

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