Climate poll ahead of HSBC’s AGM reveals split opinion

HSBC shareholders will vote this week on whether the firm should phase out its financing of coal power stations and the mining of thermal coal.

A poll of 1,305 website visitors* to interactive investor, the UK’s second-largest direct-to-consumer investment platform and number one flat-fee provider, has revealed a surprise split of opinion on HSBC (LSE:HSBA)’s climate vote to be put to shareholders at its AGM, on Friday 28 May.

HSBC shareholders will vote on whether the company should, over time, phase out its financing of coal power stations and the mining of thermal coal.

While 57% of respondents supported these issues (22% disagreed and 21% didn’t know); respondents were more mixed on whether they would back these proposals themselves. While just over half (53%) said they would, 30% said they would not, and 17% didn’t know.

Nearly six in 10 (59%) think all major banks should have shareholder votes on their climate change policies, but 26% disagree, and 15% don’t know.

Climate-related AGM votes have become a key trend among FTSE 100 companies in 2021. But many respondents were yet to be convinced about an apparent new environmental corporate conscience. While half (50%) said FTSE 100 companies are becoming more environmentally responsible, 27% thought FTSE 100 companies still need to do much more.

Furthermore, a fifth (20%) of respondents said that it is often not the companies themselves tabling these motions – but rather, activist investors, agitating for change. A further 10% of respondents said that the many climate votes seen over the year to date represent a fraction of what companies should be asking shareholders on social, environmental and governance issues.

Richard Wilson, CEO, interactive investor, says: “It’s a challenge to get private investors out to vote and investment platforms need to make it easier to do. We are working to change this and have more to do.

“Whether you feel strongly about climate votes, or see them as pandering to a ‘woke’ agenda, private investors have in many cases a lot of collective power.

“We think ballots on climate change policies will make private investors more likely to vote at AGMs, on these issues and others – and we’d like to see more meaningful resolutions put to vote. It’s not about absolving boards of responsibility – it’s about listening to the views of all shareholders on the important stuff, not just bureaucracy. That’s real governance.” 

interactive investor customers can vote for free

Customers can switch on the voting service by going into the ‘Personal details & preferences’ section of their account. For those who have switched on the ii voting service, there is a Voting Mailbox in their online account (under ‘account’ at the top-right of the page). Here they will receive notifications for all the UK-listed companies they own shares in. Where available, they will see links to view an event or place a vote.

Votes to watch

The curious case of the £250,000 cost of a car and driver (26 May)

At M&G (LSE:MNG), the £250,000 cost of a car and driver for chief executive John Foley will no doubt attract debate on Wednesday 26 May, particularly after a year of lockdown.

The benefit, equivalent to almost 25% of Foley’s near £1 million salary, is a legacy of his previous employment at M&G’s former owner Prudential.

Despite the concerns, Institutional Shareholder Services (ISS) and fellow advisory voting group Glass Lewis have recommended shareholders vote in favour of the company’s renumeration report.

Reckitt Benckiser (LSE:RKT) (Friday 28 May)

The highly competitive pay packages on offer for senior management at the Cillit Bang, Nurofen and Dettol firm have attracted shareholder attention in the past, with 18% of votes going against the remuneration report at last year's AGM.

ISS thinks this year's report may not find universal acceptance either based on the size of 2020 pay for CEO Laxman Narasimhan.

His base salary of £950,000 has been supplemented by variable remuneration of more than £4 million. In addition, awards to compensate for remuneration arrangements forfeited when leaving PepsiCo, his previous employer, in 2019 took the final figure to £8.4 million.

But ISS has recommended shareholders vote in favour of the report, adding that strong growth across most key performance indicators should be taken into account.

It noted that revenues growth of 11.8% compared favourably with the upper quartile of its peer group and was above the company's targeted mid-single digit growth. No staff were furloughed or government support taken during the Covid-19 pandemic and net debt also reduced.

ISS said: “In the round, the final quantum does not raise any material concerns as pay is broadly considered to be aligned with performance.” Fellow voting advisory group Glass Lewis is also in favour, noting that there are no issues considered to be particularly contentious.

Notes to editors

*The poll was conducted between 20-21 May 2021.