Voting in the 2024 AGM season

PGGM Investments, in its capacity as investment manager and as attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the Shareholder Proposal Number 6 regarding worker-driven social responsibility, which we co-filed.

The resolution requests Nike to: “Publish a report evaluating how implementing worker-driven social responsibility principles and supporting binding agreements would impact the company’s ability to identify and remediate human rights issues in sourcing from high-risk countries.”

• The company operates in the apparel sector that faces significant labor rights issues in global supply chains. These issues are more prominent in high-risk countries where Nike is sourcing from, exposing the company to legal, financial, reputational, and supply chain resilience risks that could undermine long-term shareholder value if not effectively managed.
• PGGM acknowledges Nike's efforts to address human rights risks in its supply chains. However, Nike's reliance on social audits as a key component of its human rights due diligence is concerning, as evidence increasingly shows that social audits often fail to effectively identify and address human rights abuses due to systemic challenges.¹ For instance, audits are best suited for finding observable failures, while gender discrimination and gender-based violence can only be identified by trusted private interviews. Additionally, Nike's involvement in voluntary corporate social responsibility initiatives, which lack enforceable commitments, falls short of providing effective remediation in countries that are high-risk for human rights violations. These voluntary initiatives differ significantly from “worker-driven social responsibility” and do not offer the same level of benefits.²
• We believe the resolution makes several effective recommendations that can enhance Nike’s current due diligence practices. Worker-driven social responsibility principles and binding agreements have proven effective in enhancing worker productivity, reducing labor rights risks, and delivering meaningful human rights outcomes in high-risk contexts.³ Many of Nike’s peers have already signed such agreements, acknowledging their importance in strengthening risk management.⁴

1. “Obsessed with Audit Tools, Missing the Goal”: Why Social Audits Can’t Fix Labor Rights Abuses in Global Supply Chains | HRW
2. “What is Worker-Driven Social Responsibility?” Business and Human Rights
3. About us - International Accord
4. Signatories - International Accord

• Nike is included in PGGM’s engagement program based on the OECD Guidelines for Multinational Enterprises, as the company has been linked to incidents in its supply chain related to labour rights violations. We believe the proposed report will help shareholders gain better insights on how the company lives up to its human rights commitments.
• In addition, the company is included in the benchmark of the Platform Living Wage Financials where PGGM is a member. Together with other 24 investors, PGGM encourages, supports and monitors investee companies to enable living wages and living incomes in global supply chains. This resolution touches upon binding agreements that supporting collective bargaining and improved wages.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution. The resolution asks for General Motors to disclose its policies on the use of deep-sea mined minerals in its production and supply chains.

The resolution asks that: “General Motors publicly disclose the Company’s policies on the use of deep-sea mined minerals in its production and supply chains.”

General Motors states in the shareholder resolution response that it has not invested deep sea mineral extraction and does not have plans to do so. However, it has not disclosed a policy stating that it will refrain from such activities until the scientific uncertainty around it is resolved. Other automobile companies, including BMW, Polestar, Renault, Rivian, Scania, Volkswagen, and Volvo, have publicly supported a moratorium on deep sea mining. We believe taking an explicit stance will provide investors the assurances that General Motors will take a precautionary approach to this sensitive topic. It will also increase pressure on regulators to ensure proper due diligence is conducted before granting licenses.

PGGM is supportive of the approach promoted by the Business Statement Supporting a Moratorium on Deep Sea Mining. We agree that critical minerals are required for the energy transition and that other ecosystems are currently being degraded because of their extraction. However, there is a lack of understanding about the full impacts of deep sea mining, which could have far-reaching implications. Before any mining occurs, it needs to be clearly demonstrated that such activities can be managed in a way that ensures the effective protection of the marine environment.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on the theme of climate change. We believe that the adoption and implementation of this resolution will provide investors assurances that the company will take a precautionary approach to this sensitive topic.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by The Province of Saint Joseph of the Capuchin Order, asking Restaurant Brands International Inc (hereafter, RBI) to produce an assessment identifying water risk exposure of its supply chain.

The resolution asks that: “Considering the growing pressure on water supplies posed by climate change, shareholders request that RBI conduct and report to shareholders, using quantitative indicators where appropriate, an assessment to identify the water risk exposure of its supply chain, and its responsive policies and practices to reduce this risk and prepare for water supply uncertainties associated with climate change.”

RBI has a supply chain risk management program in place aligned with the Taskforce on Climate-related Financial Disclosures (TCFD) climate risks analysis, but does not specifically asses or report on supply chain water risks. It also does not report on water-related indicators to the Carbon Disclosure Project (CDP) or report progress on the water commitments through the FAIRR global investor engagement on meat sourcing (2019-2022).

In many regions, consumption of freshwater surpasses the rate at which it can be naturally replenished, creating water shortage risks for companies. The World Economic Forum (WEF) predicts a 56% shortfall in global water demand by 2030. Companies without water scarcity plans face increased costs, price volatility, shifting production zones, stranded assets, regulatory targets, and loss of social license to operate. CDP estimates water risks’ financial impacts are five times greater than mitigation costs. As a major purchaser of beef and pork, RBI’s sourcing practices pressure water-stress regions, threatening long-term profitability.

A water risk assessment would clarify the company’s approach to water risks and inform water-related policies. The Taskforce on Nature-related Financial Disclosures (TNFD) advises using the LEAP approach to identify and respond to water-related risks, helping locate high-stress areas in the supply chain.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on the theme of biodiversity and nature loss. We believe that such a risk assessment will support the company in identifying and addressing the extent to which the company’s supply chain and operations are vulnerable to risks associated with water scarcity.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by Fairshare Educational Foundation (ShareAction), and 4 co-filers, including PGGM. The resolution asks Yara International ASA. (hereafter, Yara) to review its proxy voting policies related to climate change.

The resolution states: “Shareholders direct the company to publish science-based targets to reduce scope 3 greenhouse gas emissions over the short, medium, and long term, in line with the goal of limiting global warming to 1.5C, and to implement measures to reduce such emissions. Targets and measures should include upstream as well as downstream emissions and entail an absolute reduction in emissions. They should be disclosed before the next annual shareholder meeting in 2025.”

Yara is one of Europe’s leading chemical producing companies, producing agricultural chemicals such as fertilizers. Yara has publically disclosed its climate strategy, including Yara a scope 3 reduction target. However, we believe Yara’s scope 3 target is currently incomplete as the target excludes upstream emissions and would only reduce emissions by 11.1% by 2030 from a 2021 baseline. Yara has yet to publish a scope 3 Net Zero target.

Scope 3 is highly material for Yara, as it accounts for approximately 75% of the company’s emissions. Yara’s peers, such as BASF, the largest European chemical company, have begun publishing upstream emission reduction targets. In addition, later this year the Science-Based Targets Initiative will provide sector guidance on how align targets with the goals of the Paris Agreement.

As Yara has continued to push back on investor’s requests for setting comprehensive scope 3 targets, we believe a shareholder vote is reasonable and necessary and as a consequence we have co-filed this resolution and vote in favour of the resolution.

We are voting this way in pursuance of our client PFZW’s climate plan. We believe that adopting and implementing this resolution will give us more information on whether the company is sufficiently managing its climate risks and the extent to which its voting policy contributes to the goals of the Paris Agreement.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by The Maryknoll Sisters of St.
Dominic, Inc. The resolution asks JPMorgan Asset Management (hereafter, JPMAM) to review its proxy voting policies related to climate change.

The resolution states: “Shareowners request the Board of Directors initiate a review of both JPMAM’s 2023 proxy voting record and proxy voting policies related to diversity and climate change and report results to shareholders, prepared at reasonable cost, omitting proprietary information.”

JPMAM undertakes its voting and engagement activities with a focus on advancing its clients’ long-term economic interests. As PGGM, we do not dictate how JPMAM should vote for its clients. However, we support this resolution because JPMAM can improve its disclosure related to proxy voting, which would help investors understand better how the company approaches climate risk.

JPMAM is a signatory to the Principles of Responsible Investing and has signed the Net Zero Asset Manager (NZAM) commitment. Investors participating in such initiatives are independent fiduciaries responsible for their own voting decisions. They act independently and are not required to vote or engage in a specific way. However, the NZAM commitment asks participants to implement a voting policy consistent with the goal of net zero emissions by 2050, in line with global efforts to limit warming to 1.5C. We believe JPMAM can provide better disclosure on how it determines the alignment of its voting policy with this goal.

We are voting this way in pursuance of our client PFZW’s climate plan. We believe that adopting and implementing this resolution will give us more information on whether the company is sufficiently managing its climate risks and the extent to which its voting policy contributes to the goals of the Paris Agreement.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by Mercy Investment Services, Inc. and others. The resolution asks BlackRock, Inc. (hereafter, BlackRock) to review its proxy voting policies related to climate change.

The resolution states: “Shareowners request that the Board of Directors initiate a review of both BlackRock’s 2023 proxy voting record and proxy voting policies related to climate change, prepared at reasonable cost, omitting proprietary information.”

BlackRock undertakes its voting and engagement activities with a focus on advancing its clients’ long-term economic interests. As PGGM, we do not dictate how BlackRock should vote for its clients. However, we support this resolution because BlackRock can improve its disclosure related to proxy voting, which would help investors understand better how the company approaches climate risk.

BlackRock is a signatory to the Principles of Responsible Investing and has signed the Net Zero Asset Manager (NZAM) commitment. Investors participating in such initiatives are independent fiduciaries responsible for their own voting decisions. They act independently and are not required to vote or engage in a specific way. However, the NZAM commitment asks participants to implement a voting policy consistent with the goal of net zero emissions by 2050, in line with global efforts to limit warming to 1.5C. We believe BlackRock can provide better disclosure on how it determines the alignment of its voting policy with this goal. This disclosure should include an explanation of why its default voting policy is more conservative than many of its peers and proxy advisors.

We are voting this way in pursuance of our client PFZW’s climate plan. We believe that adopting and implementing this resolution will give us more information on whether the company is sufficiently managing its climate risks and the extent to which its voting policy contributes to the goals of the Paris Agreement.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by Green Century Capital Management. The resolution asks Ford Motor to report on supply chain traceability and transparency and increase procurement targets for sustainable materials.

“Proponents request that Ford issue a report on its aluminum, steel, mineral, rubber, and leather supply chains, disclosing how it can enhance supply chain traceability and transparency regarding deforestation risk and GHG emissions and increase procurement targets for sustainable materials.”

Automobile manufacturers have an extensive supply chain encompassing a range of materials with significant environmental footprints. These include steel and aluminum, which have significant carbon footprints, and rubber, leather, and rare earth minerals, the extraction of which are significant drivers of deforestation. The Science Based Targets Network lists a number of these raw materials as high-impact commodities.

Ford Motor currently does not extensively disclose where it sources its raw materials or what actions it takes to mitigate the financial and sustainability risks associated with them. We believe this increased disclosure can build on its existing commitment as part of Manufacture 2030, an industry initiative designed to help increase the sustainability of its suppliers.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on biodiversity and nature loss. We believe that increased transparency will allow investors to understand better the risks the company is exposed to in terms of its supply chain sourcing, which is made acute given growing regulatory scrutiny and competition for raw materials.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by As You Sow. The resolution asks Hershey to report on opportunities to support a circular economy for packaging at its end-of-life.

“Shareholders request that the Board issue a report, at reasonable expense and excluding proprietary information, describing opportunities for Hershey to support a circular economy for packaging at its end-of-life.”

Although the company acknowledges that product packaging plays a significant role in its scope 3 emissions, its recycling infrastructure is considered inadequate. In contrast, many of Hershey’s peers have made voluntary commitments to expand recycling. Consumer Goods companies will be increasingly exposed to financial risk related to waste management, with four US states and the EU already implementing regulations to address the issue.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on biodiversity and nature loss. We believe that a report exploring circular economy opportunities would allow investors to better understand how the company is approaching a topic that is becoming critical to its industry.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by John Chevedden. The resolution asks for near- and long-term science-based GHG reduction targets aligned with the Paris Agreement.

“Shareholders request that Centene Corporation issue near and long-term science-based greenhouse gas reduction targets aligned with the Paris Agreement's ambition of limiting global temperature rise to 1.5°C and summarize plans to achieve them.”

Although healthcare providers are not considered among the most carbon intensive companies, the industry still represents 8.5% of emissions in the United States and PGGM expects these companies to address their carbon footprint. Centene Corporation does not currently implement any GHG emission reduction target, which contrasts with peers such as UnitedHealth Group and Cigna that have done so. Furthermore, implementing a transition plan would help Centene prepare for potential regulatory changes. If the latest update is approved, the Federal Acquisition Regulation would require major government contractors to set science-based emissions reduction targets.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on health. We believe that implementing GHG reduction targets will help the company mitigate transition risks and reduce its climate impact.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by Boston Trust Walden and others. The resolution asks Expeditors International of Washington (hereafter, Expeditors) to set near- and long-term science-based emission reduction targets.

The resolution is as follows: “Shareholders request Expeditors establish near- and long- term science-based greenhouse gas reduction targets aligned with the Paris Agreement’s ambition of limiting global temperature rise to 1.5 °C and disclose plans to achieve them. The targets and plan should cover the Company’s full range of operational and supply chain emissions.”

PGGM expects companies in carbon-intensive sectors to set science-based emission reduction targets to safeguard their long-term value.

Expeditors aims to reduce scope 1 emissions per square foot from mobile equipment by 20% by the end of 2025 via electric forklifts. The company also targets a 15% reduction in scope 2 emissions per square foot by the end of 2025. Both targets have a 2022 baseline. These targets are not science-based, do not cover activities beyond 2025, and do not include scope 3 emissions. Moreover, the company shows no public commitment to the goals of the Paris Agreement.  

Expeditors does not own or operate any airplanes, ships, or trucks. The company argues that this non-asset-based model has several environmental advantages, including accelerating transitions to more fuel-efficient fleets as they become available in the market. The company can engage with its carriers to reduce their emissions. By setting science-based emission reduction targets, the company would give a credible signal that it is working with its partners to reduce emissions.

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on climate change. We believe that adopting and implementing this resolution will enhance the company’s ability to manage climate risks and benefit from the climate transition’s opportunities.

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution. The resolution asks for Goldman Sachs to annually disclose its Clean Energy Supply Financing Ratio and is filed by The New York City Comptroller, on behalf of The New York City Employees’ Retirement System. 

The resolution asks that: “Goldman Sachs Group, Inc. (“Goldman”) disclose annually its Clean Energy Supply Financing Ratio (“Ratio”), defined as its total financing through equity and debt underwriting, and project finance, in low-carbon energy supply relative to that in fossil-fuel energy supply. The disclosure, prepared at reasonable expense and excluding confidential information, shall describe Goldman’s methodology, including what it classifies as “low carbon” or “fossil fuel.” 

Goldmans Sachs currently implements a target of USD 750 billion in “financing, investing and advisory activity by 2030 to advance the climate transition and drive inclusive growth”. 1 However, it does not disclose more granular information on how much financing goes to clean energy or fossil fuel related projects, respectively. Third parties estimate that Goldman Sachs has financed approximately USD 143 billion to fossil fuels since 2015.2   

Clean-energy-to-fossil-fuel financing ratios represent a metric for assessing progress in financing the clean energy transition. Access to this information will enable investors to monitor the progress of the company on its climate commitment as part of the Net Zero Banking Alliance and hold them accountable. Goldman Sachs’ peers, Citigroup and JPMorgan, have committed to disclosing such a ratio.  

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on the theme of climate change. We believe that the adoption and implementation of this resolution will enhance our ability to assess the bank’s transition risks and opportunities. 

PGGM Investments, in its capacity as investment manager and attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the shareholder resolution, filed by Green Century Capital Management, Inc, asking PepsiCo Inc to report on risks associated with biodiversity loss in its supply chains and operations.  

The resolution asks that: “Shareholders request that PepsiCo complete a material biodiversity dependency and impact assessment and issue a corresponding public report to identify the extent to which the company’s supply chains and operations are vulnerable to risks associated with biodiversity loss.” 

PepsiCo has policies and targets in place to manage its environmental impact beyond climate change for their own operation and supply chain. For example, the company has set a goal to sustainably source 100% of their key ingredients by 2030, such as palm oil and cane sugar, and has policies in place on natural ecosystems. However, the company does not provide a clear analysis of where they should prioritize their efforts and why. 

Performing a materiality assessment of the company’s biodiversity-related dependencies, impacts, risks and opportunities would give shareholders a better understanding of the company’s approach to biodiversity and nature. The assessment could inform the company on the materiality of their impact on certain ecosystems and in certain areas. The Taskforce on Nature-related Financial Disclosures (TNFD) advises companies in the food and agriculture sector to identify potentially material dependencies and impacts using the LEAP approach. This approach helps companies to locate their interface with nature, evaluate their dependencies and impacts on nature, assess their nature-related risks and opportunities, and prepare to respond to these risks and opportunities.  

We are voting in this way in pursuance of our client PFZW’s Investment Policy 2025 and focus on the theme of biodiversity and nature loss. We believe that such a materiality assessment will support the company in identifying and addressing the extent to which the company’s supply chain and operations are vulnerable to risks associated with biodiversity loss. 

PGGM expects that companies, as well as financial institutions, will increasingly be asked to disclose and mitigate their dependencies and impacts on nature, as established in the target 15 of the UN Kunming-Montreal Global Biodiversity Framework, agreed in December 2022.  

A coalition of Nestlé shareholders, coordinated by the responsible investment group ShareAction, has filed a resolution challenging the world’s largest food company to improve its sales of healthy food products. We support this resolution and urge Nestlé to set a target to increase the proportion of its sales from healthier products.

PGGM Investments, in its capacity as investment manager and as attorney-in-fact for Pensioenfonds Zorg en Welzijn (PFZW), will vote FOR the ShareAction shareholder proposal calling on Nestlé to amend their Articles of Association to include an annual report on a number of material ESG matters and a clear ambition to increase their sales of healthier products.

The resolution requests: “that for each financial year, the Board of Directors shall prepare a report on sustainable development, social issues, employment matters, respect for human rights and anticorruption, which presents the results achieved in relation to certain environmental, social and governance (ESG) key performance indicators (KPIs). These KPIs will include absolute and proportional sales figures for food and beverage according to their healthfulness, as defined by a government-endorsed Nutrient Profiling Model. The company will set a timebound target to increase the proportion of its sales derived from these healthier products.”

• The world’s population is suffering from an obesity epidemic, largely fueled by the consumption of unhealthy products in excessive quantities. Nestlé is the largest food company in the world based on revenue. However, many products Nestlé sells are not considered to be healthy. The Health Star Rating, a system used in Australia and New Zealand to rate the healthiness of food, which Nestlé itself has adopted, notes that over 50% of Nestlé’s sales are not considered to be healthy.
• Nestlé is already performing well on leading standards such as the Access to Nutrition Index. This however does not mean that there is no further room for improvement of its entire product portfolio. Furthermore, establishing a clear strategy on improving the health aspects of Nestlé’s products in its Articles of Association makes this topic much less dependent on any future changes in Nestlé’s management and/or ambition.

Whilst PGGM believes that consumers are ultimately responsible for the choices they make, companies like Nestlé can help guide consumers in choosing healthier alternatives. This can for example be done through responsible marketing and consumer education but also by reformulating existing products to make them less unhealthy. Reaffirming Nestlé’s commitment to improving global health by including such ambitions in their Articles of Association is a step we support.

The leadership of Nestlé on improving nutrition can be cemented for the foreseeable future by adding the proposed text to their Articles of Association. The goals that will be set can become the standard to which other food companies can be held accountable.

As responsible investor, PGGM calls upon companies to implement targets and strategies to minimize their contribution to nature and biodiversity loss. The strategies should be appropriate to their businesses and aligned with the goals of the Kunming-Montreal Global Biodiversity Framework. 

More about Nature and biodiversity

PGGM seeks to contribute to a society in which economic development is not at the expense of human rights. In taking our responsibility to respect human rights, we adopt standards such as the UN Guiding Principles on Business and Human Rights (UNGPs). We ask companies to not only identify salient human rights risks in their business and supply chains but also ensure that a robust policy and implementation plan are in place to safeguard human rights.

More about Human rights

As an investor working for pension funds with strong ties to the healthcare sector, PGGM wants to play its part in helping people live healthy, prosperous lives. We therefore invest in healthcare solutions but also engage with companies to address subjects such as prevention and good access to affordable healthcare.

More about Health