If some elements of our annual 2024 Annual Engagement and Voting Review sound familiar, that’s no coincidence. To maximize our impact, we focus on long-term core topics. Engagement and voting are central to our investment process, extending beyond the important responsibility of the investments we already hold.
One year ago, we described “holding to our principles but adapting to an ever-changing world”. Who could have imagined? the changes that have taken place in a mere twelve months? Will our policies and framework stand us in good stead for the changes to come?
Transparency, expertise and situational intelligence must constitute the basis of our relations with investee companies and countries, if we hope to steer through such complexity:
Each year when we update our Proxy Voting Policy, our core tenets remain -- shareholder rights, equal treatment of shareholders, board accountability, and transparency and integrity of financial statements. We have held to these core elements since we first published them in 2003.
In late 2024, we updated our Engagement Policy. Our three key pillars – to encourage improved ESG disclosure, support investment decision-making, and influence corporate practices on ESG issues – remain part of our long-standing approach and we expanded our themes from our long-standing three of Climate Change, Human Rights, and Ethics, to five.
In a complex environment where some market participants may be cautious about speaking out, we rely on our established principles and framework to provide clear direction. To find out more, visit our sustainability presentation page
This means holding to our principles, but constantly adapting to an ever-changing world. For example, in 2023 we began to pre-declare a greater number of our voting intentions to provide transparency to stakeholders, and in some instances, as a means of escalation.
Our 2024 Annual Engagement and Voting Report explains our approach to our three focal engagement themes– Governance, Climate and Biodiversity, and Human Rights and Human Capital. With a history of active investing, we have long worked to establish consistency among our engagement efforts, voting decisions, ESG analysis, and investment strategies.
Governance is the foundation of a well-run organisation. It is not a standalone pillar within Environmental, Social and Governance (ESG) considerations but rather the foundation that underpins them. Governance is the keystone to our corporate and our sovereign analysis.
Our analyses increasingly examine whether the members of the Board include the range of skills and expertise needed to identify and manage strategy and risks of the company.
Governance is not limited to corporates. Both directly and via collaborative engagements, we are increasingly active with sovereign issuers.
The climate roadmap is continually shifting, even though 2024 saw unprecedented disruptions and real financial damage from . In a world where state debt levels are questioned, where infrastructure, industry, and education budgets often give way to defence budgets, current financing commitments remain insufficient to drive the transformative changes needed to align global emissions with the reductions that science advises. The good news is that some economics remain intact – that is, in many instances renewable energy is financially efficient as well. This should help the transition to sustainable energy, although the volatile geopolitical context has slowed the pace.
The Net Zero Asset Managers Initiative (NZAMI), of which Candriam is a signatory, made headlines in early 2025 following the withdrawal of some large US asset managers and the NZAM’s decision to ‘review the initiative to ensure it remains fir for purpose in the new global context’. This does not affect our direct efforts, or change our commitment to Net Zero.
Our multi-year Net Zero engagement campaign encourages investee companies to align with a 1.5˚C pathway. Listening to our clients, we developed a proprietary ten-point net zero emissions assessment framework. We hope to share our expertise and knowledge with our investee companies in their decarbonisation journey, with measures such as filing shareholder resolutions and active proxy voting.
Through 2024, companies showed the most improvement on four points: Ambition, Disclosure, Climate Policy Engagement, and Climate Governance. As a result, most of our efforts and objects now concentrate on how our investee companies are setting relevant and credible intermediate emissions targets, provide transparency, allocate capital to these plans, and ensure that the transition is just and minimizes other effects.
We believe our ability to stay the course arises from the long-term discipline of our engagement and voting priorities.
Find one in our recent case study, PFAS, The Invisible Threat, on how we engage with companies on their PFAS, or ‘forever chemicals’, risks.
Interested in more on how we integrate biodiversity into our investments? It’s in our policy, Looking for a new symbiosis with nature
The rapid deployment of artificial intelligence affects both human rights and human capital. AI poses significant societal risks, including potential job displacement, algorithmic bias, and the erosion of privacy as AI systems become increasingly sophisticated and pervasive.
It is astonishing how rapidly the promise and benefits of these collection of technologies, and their threats, have ramped up in just the last four years. Our efforts to understand the challenges of Facial Recognition Technology passed through several phases to our co-leadership of the Ethical AI Collective Impact Coalition of 70 asset managers (with $8.5 trillion of AuM) promoting the safe use of this powerful technology.
Beginning in 2022, our first phasefocused on engaging with companies to understand their policies and principles guiding their commitment to ethical AI, and whether governance is in place to put it in practice. The second and current phase is to understand how these are actually being implemented. Progress is in sight; companies are openly disclosing their development and use of AI technologies.
The lack of political stability means that companies increasingly face the problems of doing business in Conflict-Affected and High-Risk Areas (CAHRAs). In past decades multinational companies had the luxury of being able to avoid conflict-affected regions as their aggregate GDP, and market potential, were insignificant. The past three generations of managers have come and gone without the need to deal effectively with high-risk areas, so the culture and mindset may be missing. Today, however, the spread of conflicts into economies that together account for over 2% of global GDP means corporates are increasingly exposed.
Some industries such as oil and gas, utilities, and mining have been more exposed and are better prepared. But most companies demonstrate little in terms of policies, governance, due diligence, or remediation covering their risks of and exposure to CAHRAs. This blind spot applies not only to their own operations but also to their whole value chain. As responsible investors, we expect investee companies to have adequate policies in place.
Persistence pays. Transparency and sustainability have been improving but are still needed more now than ever before. If geopolitics and uncertainty place these goals under threat, sustainable investors must stay the course. No trend continues in a straight line. We listen to our clients. With 75% of our AuM in sustainable investments,[1] our clients have said a great deal.
At Candriam, we act on our Convictions.
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