Your voice as an investor counts, and so does your vote. Active ownership means that shareholders use their access and voting rights to help set the direction of the companies they’re invested in. This is a proven way to generate impact. Inyova is designed to enable you, the impact investors, to be active owners. Together, the Inyova community can increase access and influence. In this interview, Andreas von Angerer, Inyova’s Head of Impact, shares his views on active ownership.
In this article, we’ll discuss the following questions:
- Active ownership – what does that actually mean?
- Why is active ownership important?
- How is Inyova supporting active ownership?
- What has Inyova done around active ownership?
Active ownership – what does that actually mean?
The company shares in your Inyova portfolio that you own represent your ownership in these companies. Active ownership means that you’re using your shareholder rights to drive change at a company. There are three main ways you can do this. Engagement – which means communicating and opening up a dialogue with the company. Voting – which means supporting board or shareholder proposals via your vote at the annual general meeting (AGM) of the company. And finally shareholder activism – which means making use of your other shareholder rights. For example, the right to speak at an AGM, to file resolutions, or simply to go public with your concerns to push the company to change. This matters because using your rights as a shareholder means you can help change these companies for the better.
Why is active ownership important?
Active ownership is a proven tool to drive the improvement of sustainability practices at companies: Engaged companies tend to act, while others do not. There are several examples of how active ownership has influenced companies in a positive way. For instance, Hermes EOS, an asset manager, initiated an engagement dialogue with the management of Sinopec, a large Chinese oil and gas company. Since then, Sinopec has introduced a methane-reduction program, among other initiatives. This program has saved an equivalent of roughly 3 million tons of CO2 emissions, which is almost as high as the annual CO2 emissions of the Bahamas.
Another great example is the Sisters of the Holy Names of Jesus and Mary, a women’s religious congregation. They have gained a majority vote on their resolution that asked the gun manufacturer Sturm Ruger to monitor violent events involving its firearms, research how technology could make guns safer, and assess whether gun violence presented a reputational and financial corporate risk.
How is Inyova supporting active ownership?
We run dedicated campaigns addressing specific issues directed towards specific companies or an entire industry. We host public events to connect Inyova impact investors with company representatives, reach out to companies in case of controversies, and make use of our voting rights. We do this by supporting relevant shareholder resolutions by other impact-minded investors. We also vote against board proposals that don’t align with the values of our community.
What has Inyova done around active ownership?
We’ve been quite busy lately!
One example is our engagement with LTG. We engaged with them after we found out about their involvement in nuclear weapons testing via a new acquisition. At the time, they could not provide plans to sell off this controversial company anytime in the near future – so we divested. However, after only 6 months, they informed us that they had taken action and sold their stake in the nuclear weapons testing. This was a perfect example of how addressing crucial issues through an engagement dialogue, can create real change at a company.
We also lead a comprehensive shareholder activism campaign with the BMW Group. Our objective was to diversify and upskill their board to accelerate their transition to zero-emission mobility solutions. To achieve this goal, we spared no efforts. We not only engaged with the company, but also fellow investors and other stakeholders such as mobility experts and NGOs (like Greenpeace). Additionally, our campaign saw broad media coverage in all major outlets. Although we weren’t able to make our pick for the supervisory board stick, we were able to place ending the combustion engine on BMW’s corporate agenda.