High approval for sustainability reports despite criticism
Published: Wednesday, Jul 17th 2024, 09:50
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The sustainability reports of the largest Swiss companies were approved by shareholders without grumbling. However, proxy advisors often consider the reports to be inadequate.
This level of approval is usually only seen in dictatorships: on average, the sustainability reports of companies in the Swiss Market Index (SMI) were approved by shareholders at general meetings with almost 97% of the votes. This is according to an analysis by the news agency AWP.
The differences between the approval ratings were extremely small, ranging from 91% to 99%. By comparison, the remuneration reports of the same companies received significantly less approval from shareholders, averaging 82.5%.
More transparency required
The votes on sustainability reports were a first: for the 2023 financial year, large Swiss companies had to submit a sustainability report to shareholders for the first time. These requirements are based on the counter-proposal to the Responsible Business Initiative. In the report, companies publish information on CO2 emissions, energy consumption and the proportion of women, among other things.
However, there was a lot of criticism in the run-up to the Annual General Meetings. The shareholders' association Actares, for example, recommended that around two thirds of the SMI companies' sustainability reports be rejected. In most cases, it justified its "no" vote with an inadequate climate strategy.
Ethos was similarly strict. The foundation recommended that shareholders reject around half of the sustainability reports, including those from Roche, Nestlé and UBS.
Director Vincent Kaufmann finds the high level of shareholder approval surprising. Because: "The quality of most reports is very unsatisfactory," he says. He wonders whether the shareholders have really analyzed the sustainability reports in depth. Because this is very time-consuming.
Federal Council wants to sharpen up
When the foundation rejects a report, it is usually due to a lack of transparency. "In many cases, we found the quality of the published data inadequate and the ecological targets not ambitious enough," explains Kaufmann.
Despite new legal requirements, the foundation continues to observe major differences between companies. "We therefore believe that the regulations for non-financial reporting need to be improved." The Federal Council's proposal, which calls for the application of reporting standards and an external audit of the report, among other things, is a step in the right direction.
©Keystone/SDA
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