Amundi’s Le Meaux: Engagement won’t work unless backed by government strategy

Head of ESG research, voting and engagement discusses the limitations of investor action and changes to the firm’s approach


Companies will only make changes that are backed by their own governments and in line with country regulation and policy, and will not deliver what investors ask for in their engagements otherwise, says Amundi head of ESG research, voting and engagement Caroline Le Meaux in this video interview.

Le Meaux also discusses changes to the firm’s engagement processes and shares an example of escalation.

Watch the full video interview above and read the transcript below.

NT: Hello, you’re watching ESG Clarity where I’m welcoming back Amundi head of ESG research, voting and engagement Caroline Le Meaux. The last time we spoke for a video in 2021, you said that Amundi would be using engagement more to express its ESG views. How have you demonstrated that since then?

CLM: Thank you for inviting me. Yes, we did. We are now having a different way of using our voting rights. Firstly, will be in assessing different shareholder resolutions. So we do it internally where we assess the value of different ESG shareholders proposition. When we have a compensation-related resolution, we ask that there is part of the compensation based on ESG or climate criterias.

And also, we have a list of what we call ESG laggards. So a company where we think they are not doing enough. Or it could be just because they are not doing enough or sometimes because of our engagement. We are not positive enough and we escalate through our voting either by voting against or a discharge of the board members or sometimes against the elections or the renewal of some board members.

NT: Can you give an example of where you have had to escalate an engagement in any of the ways that you’ve mentioned?

CLM: On J-Power, which is a utilities company in Japan, were co-leads on a collaborative engagement on that company and we escalated. It was in 2022 where we filed with the other co-lead a resolution three released last year. And this is one of the of the escalation possible.

Sometimes escalation works nicely. Like for example we are lead on a Climate Action 100+ with the US company. We did escalate on by filing a shareholders’ resolution and the company did improve a lot this year. But you will never know if it’s thanks to us or if the company was anyhow doing the work.

NT: You mentioned Climate Action 100+ and when we still spoke in 2021, it was a new group and there was a lot of excitement around collaborative engagements, lots of things going on in that area. And a couple of years on, there’s a little bit more criticism, I guess people are a little more angsty to see the to see the results of groups like this – there was Engine No.1’s proxy contest back then as well. What do you think the future holds and how do you think engagement can continue to be effective in the future?

CLM: There are several elements we need to have in mind when I speaking about engagement. First, engagement takes time. So, you know, a company, a big company can’t change overnight. So even for the Exxon cases, you were mentioning, the new board members who were elected in 2022, and after that, they need to advocate it internally. Even if there is something internal, they will have to assess how to do it before being able to communicate on it externally, because all these company are highly regulated. So they can’t say, they can’t share any kind of internal discussion without approving it and having a plan.

We don’t know how effective those three people are, maybe they are very effective, but we don’t know yet and probably and we will know maybe in one year’s time, they need time to have any kind of effect. That’s the first thing.

Second thing, which is really important, is that financial investors are just part of a system. They can’t have an impact alone. By definition, a utilities like J-Power where they will only do something if they have backed by their own governments. So, you know, we can push, for example, on what we think our best practices for utilities, but if the Japanese government has a strategy as it is today, which is not in line with what we think would be best, like a phase out from coal by 2030, then J-Power is not going to be able to deliver what we asked for.

NT: Do you think then the investor engagement excitement or claims in the future are going to need to be in this context of not actually being able to be effective about these other factors at play? Do you think there needs to be a little bit of a muting of what investors claim engagement is able to do?

CLM: I see that companies have improved. But when you are comparing to what we would like to achieve, you know, it’s baby steps. The thing is, engagement is baby step after baby step. And you could do a better improvement if the system is in line with what you ask.


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