Carmaker Volkswagen (VW) has rejected a shareholder proposal sent last week from seven European investors urging the company to explain how its lobbying activities help to address climate risks.
The proposal by the shareholders – which include Sweden’s AP7 and UK’s Church of England Pensions Board (CEPB) – came after more than three years of dialogue with VW.
According to CEPB, the continued rejection of this request for transparency is in contrast to many of its German peers including Mercedes-Benz and BMW, which have both made recent public commitments to include a review of climate lobbying policies and positions as part of their annual disclosures.
Other shareholders involved include asset manager Schroders, Swedish pension funds AP2, AP3 and AP4, plus Denmark’s AkademikerPension.
The annual general meeting (AGM) escalation was also supported by CA100+ engagement lead EOS at Federated Hermes, which was not part of the co-filing group, but has been engaging actively with VW on the issue of climate policy engagement since early 2019.
CEPB said in a statement that this is the latest shareholder engagement on this issue which has been put to VW.
The company rejected this latest shareholder proposal on the basis that it deems it beyond the competence of the general meeting: “The board of management alone is responsible for deciding on the content of the non-financial report in accordance with the interests of the company,” according to CEPB’s release.
Charlotta Dawidowski Sydstrand, sustainability strategist at AP7, said: “As long-term shareholders we would have preferred VW to make this commitment voluntarily. We filed the amendment as we are determined to ensure that the company registers the importance of this issue at the highest level.”
She added: “It speaks volumes that they [VW] have rejected the amendment on the basis of saying the board knows best, yet the board is still failing to deliver transparent oversight of the company’s climate lobbying.”
Pia Axelsson, senior sustainability manager at AP4, said: “It is unfortunate that VW now sends this negative message that it does not intend to report on its climate lobbying, something which could counteract the necessary transition to a net zero economy. It is particularly disappointing since the proposal is supported by so many institutional investors.”
Clare Richards, senior engagement manager at the CEPB, added: “Volkswagen has the potential to be a leader on responsible climate lobbying. That’s why it’s all the more disappointing that VW has chosen to trail behind its peers, such as BMW and Mercedes-Benz, both of which are the among the many companies that have responded positively to investor requests for greater disclosure on their climate lobbying.”
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