Engagement and voting in practice

Read our case studies to find out how Royal London Asset Management uses its role as a shareholder to influence positive change and help deliver better long-term outcomes both for our customers and the wider world.

Royal London Asset Management uses a combination of close engagement and shareholder voting rights to encourage good management decisions in the companies it invests in, with environmental, social and governance (ESG) themes forming the focus of these activities.

Early in 2022, Royal London Asset Management engaged with Amazon to discuss its climate commitments, employee relations and governance practices around tax disclosures. Several of the topics discussed formed the basis of shareholder proposals tabled at the 2023 AGM, with a record 18 resolutions submitted for consideration.

Engagement focus - Royal London Asset Management meeting with Amazon

Climate reporting

Amazon reiterated its commitment to disclosing how it’s tackling its climate commitments and will only turn to carbon offsets as a last resort. The company noted that some parts of its supply chain (for example freight and shipping) are harder to decarbonise, and it doesn’t yet have a clear plan to tackle this.

Employee relations

Amazon continues to push back against unionisation, claiming that unions work against company and employee best interests. However, it agreed to at least have a conversation with the union if employees voted in favour of one. Employees have since voted to support forming a union at Amazon’s fulfilment centre in New York.

Tax disclosure

There’s been concern around Amazon’s level of tax disclosure. During its engagement with Amazon, Royal London Asset Management emphasised the importance of clear and transparent disclosure on tax. However, Amazon remained firm on not disclosing more information.


2023 AGM shareholder proposals - voting activity snapshot

Tax transparency

Royal London Asset Management voted in favour of a proposal for increased disclosure on tax to help shareholders assess Amazon’s tax-related risks. This vote reinforced Royal London Asset Management’s previous discussions with the company about its disclosure approach.

Animal welfare standards

Royal London Asset Management abstained on a vote for a report evaluating animal welfare standards at Whole Foods, bought by Amazon in 2017. Shareholders had tabled concerns about Whole Foods’ animal welfare practices. While Royal London Asset Management supports better disclosure, Amazon is considered open in its approach to this issue, promotes high standards and has shown itself quick to act in response to any identified issues in the supply chain. Royal London Asset Management also considered the proposed timeline to report on this issue was overly pressured.

Climate risk in employee pension default options

Royal London Asset Management voted against a proposal requesting that Amazon reports on how it’s protecting pension scheme members with a longer time to retirement from climate risk in the company’s default investment options. While Royal London Asset Management saw the merit of the ask, it believes that this is already the case, with employees able to choose where their pensions are invested from a large number of options.

Third-party assessment of freedom of association

Freedom of association allows workers and employers to create and join organisations of their choice without fear of reprisal. That includes joining unions and bargaining collectively for better working conditions. Royal London Asset Management voted in favour of a request for Amazon to disclose how it ensures workers’ rights in this area, particularly since there have been some significant controversies about Amazon’s labour practices and apparent anti-unionisation rhetoric at some sites.

Employee salary considerations when setting executive compensation

Royal London Asset Management voted against a proposal to take into consideration employee salaries when setting executive pay. It believes that these decisions are usually best left to the compensation committee, which has access to a greater degree of information than shareholders.

Royal London Asset Management also voted against a Board-tabled executive compensation proposal as it believes the compensation structure falls short of best practice standards, with a lack of performance-related incentive plans and a reliance on discretionary grants.

As a signatory of the Net Zero Asset Managers initiative[1], Royal London Asset Management looks to influence companies to adopt emissions reduction targets and climate transition plans that support the goal of net zero greenhouse gas emissions by 2050 or earlier. Royal London Asset Management has developed a Climate Transition Assessment, which uses 12 indicators to help assess companies’ climate transition plans, such as BP’s (the energy business) and it expects to influence decarbonisation through this approach.

Engagement and voting activity around BP’s climate plan

BP’s climate plan was approved by shareholders at the 2022 Annual General Meeting (AGM). In February 2023, BP announced changes to this plan on the back of changing political sentiment across Europe and US, with governments looking for increased oil and gas production in an attempt to lower energy prices in the short term.

BP insisted that these decisions weren’t a change in strategy and stressed its commitment to reducing global emissions through further investment of up to $8bn in cleaner technologies.

However, Royal London Asset Management wasn’t comfortable with the lack of shareholder consultation on the changes to the climate plan. It believed BP should have given shareholders the opportunity to vote on the new plan at the 2023 AGM.

Royal London Asset Management met BP’s Chief Executive and other senior leaders to discuss its concerns about the updated climate plan and explain its voting rationale at the upcoming AGM. Due to these concerns, Royal London Asset Management voted ‘Against’ the re-election of the company’s Chairman at the AGM, and also wrote to the Chief Executive in June 2023 to reiterate its concerns and voting rationale.

Voting activity around greenhouse gas emissions reporting and reduction

Royal London Asset Management voted ‘Abstain’ on a shareholders’ proposal around reporting on and reducing greenhouse gas emissions. While Royal London Asset Management still largely supports BP’s approach, there are a number of areas where it wants further detailed disclosure, this is particularly true given the changes to the climate plan that BP announced in February 2023, and the fact that the plan wasn’t resubmitted to shareholders for a vote.


[1] The Net Zero Asset Managers initiative – An international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions

Compass is a UK company providing food contract services to businesses. The company operates across 45 countries in 55,000 client locations and employs around half a million people.

Focus on diversity

Royal London Asset Management invests in Compass, and as part of its regular reviews was looking at engaging with the company on its diversity policies and practices to gain greater insight and encourage increased transparency.

The Compass board had recently established its ‘people commitments’. As part of this, it identified areas where the company could make improvements on diversity – particularly in leadership, teams and diverse talent.

Royal London Asset Management met the company’s group chief people officer and one of its independent non-executive directors, who is also the workforce engagement lead with a focus on building relationships with employees. The meeting aimed to understand how Compass is implementing and measuring diversity activity and engagement, specifically around ethnic minorities, and how this supports Compass’s ‘people commitments’.

Using data collated predominately on its US employees, Compass was able to prove that when it had more women in leadership teams, it has enjoyed more business success, and also has seen proportionately higher levels of engagement from ethnically diverse employees in the US.

In the UK, Compass is focusing on diversity related to social and economic factors and plans to look at its recruitment practices to encourage more people from different backgrounds to apply for roles. On bias and prejudice issues, the company explained that this often starts with ignorance, so it’s working on addressing this through education.

Compass has also highlighted areas where it’s looking to improve, such as the proportion of female senior leaders.


Royal London Asset Management has invested in Compass for a long time and continues to see the company as a leader in diversity policies and practices. We are encouraged by what Compass is doing in terms of employee engagement and initiatives, as well as by how it’s giving investors and stakeholders greater visibility, including through publishing more information on its progress. Royal London Asset Management sees this increased transparency as a welcome sign that Compass is genuinely committed to diversity within its workplace.

Purpose: To meet the new Chairman and discuss strategy, governance and sustainability issues.

Outcome: Royal London Asset Management was generally impressed by the Chairman’s knowledge and experience in the retail sector, including his full grasp over the main challenges and opportunities facing Greggs. To get to know the business, he spent time serving up sausage rolls at the company’s stores in Manchester. Across the retail sector, there has been a dampening of demand and increased challenges on employee wage bills which are difficult to navigate. However, Greggs has a strong workforce culture and maintains long retention levels amongst its employees. The Chairman aims for Greggs to have market leading sustainability reporting and identified that diversity will remain a key feature during recruitment drives.

Purpose: To encourage companies to integrate social considerations in their climate transition plans.

Continuing its collaboration with Friends Provident Foundation (FPF) and building on its successful Just Transition engagement with utilities companies, Royal London Asset Management is expanding its focus to banks and social housing.

  1. Energy utility companies 

    Companies in scope: SSE, EDF, Scottish Power, E.ON, Centrica, National Grid, RWE

    Update: During 2021, Royal London Asset Management saw significant success as five utilities out of the seven it has engaged with published Just Transition strategies or commitments within their climate plans. National Grid also published a standalone report. Additionally, Royal London Asset Management held a follow up meeting with the sector leader SSE.

    - National Grid plc - Acknowledging the need for a Just Transition, National Grid has published an initial report on the topic outlining feedback from a diverse range of stakeholders and committing to develop a strategy in 2023. Royal London Asset Management will continue to monitor how the company acts on the report’s findings and provide feedback for subsequent Just Transition strategy publication. 

    - SSE plc - Having been the first company to publish a Just Transition report, SSE continues to lead the way. Following Royal London Asset Management's and Friends Provident Foundation's suggestions, it's seeking to report against the principles set out in its strategy and use social metrics that show progress.

  2. Banks

    Companies in scope: Barclays, HSBC, Lloyds Banking Group, NatWest

    Update: Capital providers play an important enabling role in transitioning customers to sustainable low-carbon economies. By developing and having in place a Just Transition policy, banks can better assist the wide range of sectors, regions and communities that they finance. Royal London Asset Management and Friends Provident Foundation asked at the AGMs of Barclays, Lloyds Banking Group and HSBC if they would consider integration of Just Transition throughout their climate transition plans. They have met all four banks since then.

    - Lloyds Banking Group plc - Lloyds appeared eager to integrate Just Transition into its work and reporting, yet uncertainty remains about how this will look in practice. Lloyds was particularly keen to receive guidance from GFANZ and TPT, two organisations developing guidance on climate transition plans. Royal London Asset Management will continue to monitor Lloyds' disclosures going forward and seek more opportunities to provide the company with feedback.

    - NatWest Group plc - NatWest acknowledged the need for Just Transition to be considered when implementing its climate goals but isn't prepared currently to signal commitment. It considers its purpose closely aligned with social impact and guiding how it implements their climate commitments.

National Grid put its climate transition plan up for approval by shareholders in July 2022. Ahead of the 2022 AGM, Royal London Asset Management engaged with the company to discuss the US side of the business, which still holds high greenhouse gas generating assets and sells natural gas to clients, directly accounting for high scope 3 emissions. National Grid confirmed that it's in the process of devising separate targets for generation linked to intensity per MWh, with a view to ensuring a group-wide science-based targets initiative.

Approval of climate transition plan – abstained: Following careful review, Royal London Asset Management analysts assessed that the company has a robust climate transition plan and ambition to be net zero by 2050 on all scopes of emissions, only using offsets for residual emissions. Remarkably, the company is also already enabling the delivery of low carbon energy at scale. Moreover, National Grid’s climate-related financial disclosures appear to be consistent with the task force on climate-related financial disclosures (TCFD) recommendations and recommended disclosures. While encouraged by Royal London Asset Management's engagement to date, it was felt that there was scope to align the company’s US gas-focused business segments across generation and gas distribution with the Paris Agreement.

Purpose: To discuss Royal London Asset Management's votes against the company’s remuneration plan and subsequent press statements.

Outcome: Royal London Asset Management outlined its issues over Ocado’s value creation plan (VCP) which awards directors based on a single performance metric with limited performance criteria, the ability to ‘bank’ the awards, and a disconnect between pay and performance. It discussed the company’s US-style pay scheme and competitor compensation, as well as its approach to pay with employees. Overall, Royal London Asset Management wasn't encouraged by Ocado’s responses and continues to hold concerns over the company’s long-term incentive framework.

Shareholder proposal on living wage – abstain: A coalition of shareholders led by ShareAction filed a shareholder resolution calling for Sainsbury’s to accredit as a living wage employer. After careful consideration and several discussions held internally, Royal London Asset Management decided to abstain on the proposal.

Its review took account of several factors such as how prescriptive the request was, the current economic environment and Sainsbury’s ongoing position on the living wage front. Royal London Asset Management would be fully supportive of the company pursuing living wage accreditation, but believes it is best placed to decide on a timeline that suits the business and stakeholders’ needs.  

SSE (Scottish and Southern Energy) is an energy utility company that helps produce and distribute gas and electricity to our homes. It’s one of the largest producers of wind power in the UK and has committed to become ‘net zero by 2050’ – which means that by 2050 the amount of greenhouse gas emissions produced by SSE will be equal to the amount it removes from the atmosphere.

Royal London Asset Management’s Responsible Investment team has been champions of SSE’s strategy to move to wind power and reduce its reliance on coal and gas, which will have a big benefit for our climate. However, it has also been talking to SSE about the Just Transition – what the company is doing to make sure that its transition to lower carbon energy considers any social impact, like job losses or making energy bills unaffordable.

What action did the engagement drive?

Together with the Friends Provident Foundation, an independent charity working towards a fair and sustainable economic system that serves society, Royal London Asset Management’s Responsible Investment team met representatives from SSE to check its progress on net zero and a Just Transition. Following this, SSE agreed to publish a formal Just Transition strategy, the first company to do this globally.

We see this as a great example of how engagement can lead to positive outcomes for society.

Engagement with Shell’s chairman

In the lead-up to Shell’s 2023 Annual General Meeting (AGM), Royal London Asset Management met the chairman to discuss progress on the company’s climate transition plans and reiterate its requests for improvements. Shell confirmed it expected to meet its 2030 targets, although it may not be a completely smooth or straight journey.

AGM voting activity

Shell noted Royal London Asset Management’s request for transparency around the cost of carbon credits. Carbon credits are a mechanism that incentivises companies to reduce greenhouse gas emissions.

Royal London Asset Management also urged the company to disclose all its emission reduction targets to facilitate assessment of how these align with the Paris Agreement – the 2015 legally binding international treaty on climate change. This disclosure request included targets for emissions directly generated by Shell’s activities (known as Scope 1 emissions), but also emissions associated with activities that it is indirectly responsible for (known as Scope 3 emissions). This could include, for example, suppliers in the value chain and employees’ emissions when commuting. These Scope 3 emissions typically account for the majority of an oil and gas company’s carbon footprint so need tackling to meet the aims of the Paris Agreement[1].

Last year, Royal London Asset Management voted ‘Abstain’ on Shell’s energy transition strategy (what it calls ‘Powering Progress’). It didn’t believe the measures outlined in that strategy went far enough and also wanted to see the company’s progress on specific issues that would make Shell more robust. At the 2023 AGM, Royal London Asset Management noted the company’s considerable investment in scaling up technology that can help with emissions reductions. But in the absence of further progress against the asks in 2022, Royal London Asset Management voted ‘Against’ on the equivalent 2023 proposal.

AGM follow-up engagement

Following the AGM, in June 2023 Royal London Asset Management met Shell’s Head of Scenario Modelling. The key takeaway from this meeting was that the company’s most ambitious decarbonisation scenario, based on realistic changes in government policies and people’s attitudes, showed a rapid reduction in the demand for natural gas. But Royal London Asset Management isn’t clear about the link between Shell’s climate modelling and its decision to continue growing its natural gas business.

Lobbying activity

Royal London Asset Management took part in Shell’s Capital Markets Day in June 2023 – an annual event that gives investors and shareholders the chance to meet the company’s management and find out more about its strategy. The key takeaway from the event was that Shell’s energy transition strategy, ‘Powering Progress’, would drop investments in its power generation business. Shell also claimed that it had already reduced oil output by 1-2% as a result of selling its shale business. However, in Royal London Asset Management’s opinion this goes against supporting an actual world emission reduction as the oil was still being produced by another organisation rather than actual production being stopped.

Royal London Asset Management wrote to Shell’s Chairman following the Capital Markets Day announcements, reiterating its asks of the company including transparency around carbon credits and disclosure of emissions reduction targets. Additionally, Royal London Asset Management joined the World Benchmarking Alliance’s engagement with oil and gas companies and is co-leading engagement with Shell on what it’s doing to address the social challenges of a low-carbon transition – known as a ‘just transition’. (The World Benchmarking Alliance is an organisation focused on methodologies to identify sustainable business behaviour).

[1] Scope 3 Emissions - (unglobalcompact.org.uk)

Tesla’s quirky governance gives some insight into its management and business practices, including its approach to board diversity, employment issues and net zero. At the 2022 AGM:

  • There was a high vote against the chair of the governance committee after the company failed to implement a shareholder proposal to declassify the board. 
  • A management proposal to eliminate supermajority voting was passed.
  • Royal London Asset Management abstained on a shareholder proposal about board diversity. While it agreed in principle with the proposal, it noted that implementing it would potentially skew the current board make-up towards a particular ethnic group.
  • Royal London Asset Management supported a shareholder proposal on mandatory employee arbitration practices. It voted for this proposal because it thinks Tesla's approach to employee relations could be improved, given that the company's facing a number of employment-related claims.
  • As an electric car manufacturer, there's no doubt that Tesla is one of the companies which can help provide solutions to the climate transition challenges we face. So Royal London Asset Management supported a shareholder proposal for Tesla to align its policy lobbying activities with the objectives of the Paris Agreement.