Companies that do not have any women directors or have a not so clean history with respect to taxes is being planned to be put under pressure by a group of Christian church investors in the UK.
The Church Investors Group has pension fund members with £21bn in assets.
Those large companies that have poor polices on tax transparency and climate change would find the group voting against the chairmen and women of boards, it said. The group would also vote against those annual pay reports that tend to be selective and do not clearly disclose the pay gap and ratio of pay difference between the top executives of a company and the common employees.
There are 67 members, including the pension funds for the Church of England and the Methodist Church, in the Church Investors Group (CIG).
“Ultimately a company’s license to operate depends on the confidence of the public and its long-term contribution to the common good,” said Canon Edward Carter, chair of CIG.
“As asset owners, we will continue to press with our votes the need for companies to act responsibly and work not only for the benefit of shareholders, but also contribute to the wider common good in both the short and long term,” he said.
Its plans on voting have been disclosed to FTSE 350 companies – which are the biggest companies that are publicly traded in London, CIG says.
And in addition, in with respect to tax transparency, Russell 50 companies – an index of the biggest US companies, would also be included in its plans, the group said.
Typically, all of these large publicly traded companies would be holding their annual general meeting where in the shareholders of the companies would be given the chance to vote on board membership, pay for the top bosses and acceptance of annual results
Those FTSE 350 and Russell 50 companies that have a score of zero for tax transparency in the FTSE ESG ratings would be voted against by it, the CIG says. FTSE ESG ratings takes into consideration environmental, social and governance issues.
According to a report by the Financial Times, that currently includes Exxon, Amazon and Broadcom.
The CIG also said it wanted to “take a hard line on excessive executive remuneration” and that it “continues to have concerns about CEOs receiving pension payments that are more generous than those made to other staff”.
A £8.3bn investment fund lies with the Church of England. That money is invested by it in an “ethical and responsible way”.
Companies such as pharmaceutical giant GlaxoSmithKline, the bank HSBC, supermarket Tesco, as well as tech firms Microsoft and Samsung are ones in which the Church holds investments.
However, it has been criticised for some of its investments.
A day after the Archbishop of Canterbury Justin Welby said the firm was “leeching off the taxpayer”, the Church said it was keeping its shares in Amazon in September. The archbishop had questioned Amazon’s tax record.
(Adapted from BBC.com)