Pay tops member ESG concerns; climate worries remain prominent

Pay is the most voted-on issue among the shareholder resolutions put to scheme members via Legal & General Investment Management’s (LGIM) partnership with Tumelo, while climate held a “strong second place” despite featuring in fewer resolutions

Analysis by the firm revealed the top 10 environmental social and governance (ESG) issues that matter the most to defined contribution (DC) members in terms of resolutions most-frequently voted on by individual scheme members.

The analysis, which considered over 13,000 votes cast by individual DC pension scheme members, revealed that pay was the most voted-on issue after attracting 3,120 advisory votes.

However, this issue also had the most available resolutions, with 46 different resolutions referring to pay put to members, ranging from approval of board remuneration to staff wages.

Climate held second place, despite only appearing in resolutions put to members 14 separate times during the period, with the Paris Agreement also found to be prominent, as 460 individuals voted on this issue on the basis of just two separate resolutions available.

Furthermore, further specific areas within the environmental realm were raised as being important to members, with plastic, packaging and pollution receiving 837, 644 and 307 votes, respectively.

Rights, usually referring to human and social rights but also capturing animal rights, and lobbying were ranked third and fourth after receiving 1,027 and 847 votes from individual members, respectively,

Diversity was also highlighted as a “clear priority” for members after receiving 370 votes, and, whilst only three relevant resolutions used the word ‘racial’, this aspect of the diversity conversation was also found to be a key area of concern, ranking ninth overall with 332 votes.

Commenting on the findings, LGIM co-head of defined contribution (DC), Stuart Murphy, said: “This technology and exciting partnership with Tumelo is already making an important difference.

"Pension Schemes and fund managers managing relationships with corporate boards are increasingly going to be able to consider and even reference this polling of scheme members.

“Equally, and perhaps more importantly for the long term of the pensions system, this has opened up a new way for individuals to feel truly consulted about the detailed ways their retirement funds will shape corporate activity and society at large.

“At a time when DC pensions need more voluntary contributions, more understanding and in general more interest from members – we’re excited about the future as we roll this out further.”

Tumelo CEO, Georgia Stewart, added: “Working closely with LGIM, we have proven members care passionately about ESG issues and that these issues can be used as successful engagement topics to improve members’ connections to their long-term savings.”

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