On Thursday 14 November, the annual meetings of Ethos' shareholder dialogue programmes took place in Neuchâtel. The event provided an opportunity to define the engagement themes for the future and to celebrate the 20th anniversary of the Ethos Engagement Pool Switzerland. This pool has been launched in 2004 and has since then promoted best practice in corporate governance and sustainability among Swiss listed companies.
The annual meeting of the members of Ethos' two shareholder dialogue programmes - the Ethos Engagement Pool (EEP) Switzerland and EEP International – took place on Thursday in Neuchâtel. The meeting was an opportunity to celebrate 20 years of dialogue with the largest Swiss listed companies.
EEP Switzerland was created in May 2004 at the initiative of two pension funds: those of the city of Zurich and the staff of the public medical institutions of the canton of Geneva (now CPEG). Its aim is to conduct an ongoing and constructive dialogue with SPI companies on environmental, social and governance (ESG) issues. It currently has 189 members representing more than CHF 375 billion in assets under management.
On this occasion, Dominique Biedermann, founder and former CEO and then chairman of the Ethos Foundation, and Sabine Rindisbacher, representative of the Pension Fund of the City of Zurich, opened the event as signatories of the first EEP contract in May 2004. They spoke about the reasons that led to the creation of EEP Switzerland, and the development and progress of shareholder dialogue over the past 20 years.
As is the case every year, a representative of a listed company in Switzerland was invited to share his or her views on shareholder dialogue with the members of the two pools. Andreas Umbach, Chairman of Landis+Gyr and SIG Group, two companies in the SPI, took part. He spoke in particular about the importance of corporate governance and his expectations of the members of his boards of directors, especially in terms of defining the company's strategy.
Finally, Tarek Bouhouch, representative of the Dutch NGO ‘Follow This’, addressed the issue of dialogue with fossil fuel companies. He recalled the key role of shareholders in pushing such companies to speed up their climate transition.
Independence and diversity will be at the heart of 2025 dialogue
The members of the two pools used this meeting to validate the priority engagement themes for the coming year. For both EEP Switzerland and EEP International, climate change, governance, respect for human rights and biodiversity will be at the heart of dialogue activities in 2025.
A new approach to engagement has also been proposed and approved by the members of EEP Switzerland. This will involve conducting targeted campaigns on companies that are particularly exposed to specific ESG fairness issues, along the lines of what is already being done at the international level. ‘The aim is to focus on a limited number of companies over a period of three or four years, so that we can better assess their progress’, explains Vincent Kaufmann, Director of Ethos. In 2025, EEP Switzerland plans to launch specific campaigns on the independence of boards of directors, gender diversity on boards, the separation of powers between the CEO and the chair of the board, and the need for companies to set science-based climate targets.
EEP International will launch a new direct engagement campaign to promote respect for children's rights in supply chains over a four-year period. It is currently planned to target six MSCI World companies in the mining and agri-food industries which are highly exposed to child labour, and which do not have adequate processes in place to guarantee respect for children's rights.
At the same time, the members of EEP International will support an initiative launched by CPEG and Ethos to engage in a more active dialogue with asset managers, specifically on the way in which they exercise their clients' voting rights at the general meetings of companies that are controversial or whose sustainability strategy is deemed unsatisfactory. All too often, there is a gap between what asset holders ask for as part of the shareholder dialogue and the way in which they exercise their voting rights.
