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Credit Suisse AGM shows clear momentum for climate action – will the bank step up?

Unprecedented support for the first-ever climate resolution at a Swiss company is an important moment for shareholder activism.

We’ve made history.

Last Friday, the first-ever climate resolution was voted on by a Swiss company: Credit Suisse.

What’s more, nearly a quarter of the bank’s shareholders voted against management – 18.5 per cent for the resolution, with another 4.27 per cent abstaining – including influential investors such as Aviva Investors, LGIM, the UK’s largest asset manager, and BVK, the largest pension fund in Switzerland

It is an important moment for shareholder activism. It shows Credit Suisse that its investors want it to go further on climate change. And it sets an important precedent for stewardship in Switzerland.

There’s growing momentum for climate action

Last week’s result was huge. Not only did nearly 25 per cent of investors vote against the recommendation of the Credit Suisse board, but they also voted against the recommendation of the two biggest proxy advisors: ISS and Glass Lewis.

Both advisors recommended a vote against the resolution.

And as the first-ever resolution in the Swiss market, it received a higher level of support than most similar resolutions in other jurisdictions.

The first climate resolution in France at Total in 2020, for example, received some 16.8 per cent support. The first two filed in the UK at Shell and BP in 2009 received just 11 per cent and six per cent respectively.

It represents a growing groundswell of investors looking to companies to step up on climate change.

In other jurisdictions, such a vote would force a company’s board to sit up a listen.

In the UK for example, when 20 per cent of votes go against a board recommendation a company is required to explain what actions it will take to consult shareholders and understand their concerns.

An update on the views expressed must then be given within six months.

While this does not apply to Credit Suisse, the result highlights ongoing frustration over Credit Suisse’s current climate strategy.

And it shows growing momentum for climate action – not just at Credit Suisse but across the banking sector.

Some investors still fail to walk their net-zero talk

But there is no denying a significant cohort of investors still took the easy choice to vote with management.

In today’s world – with the worsening climate crisis at our door – this is a questionable strategy.

Many of them have made public commitments to net-zero.

Yet they are still not taking the opportunities available to them to put these commitments into action.

Investors are increasingly being asked by their clients and beneficiaries to demonstrate how they are engaging with companies to operationalise their net-zero ambitions.

Robustly engaging with high-impact sectors such as the banking sector – by filing and supporting targeted resolutions and voting against inadequate Say on Climate plans for example – must be at the core of that.

As the climate crisis intensifies and public awareness grows, investors that continue to vote against important climate resolutions will have a lot to answer to their clients for.

What’s next for Credit Suisse?

Last week’s closed doors AGM – a decision widely criticised by ShareAction and shareholders including Ethos Foundation – took place against a backdrop of protests, as groups gathered outside the bank’s Zurich office to make their discontent heard.

Meanwhile, shareholder discontent was heard through the resolution.

Together they are a clear call from stakeholders for Credit Suisse to step up on climate change.

The resolution, filed by ShareAction, Ethos Foundation - a network of 225 Swiss pension funds interested in responsible investment – and a EUR2.2 trillion coalition of 11 investors asked the bank to improve its climate risk disclosures and policies, including its fossil fuel policies.

We think it is important that Credit Suisse listens to these asks.

In particular, we urge the bank to:

  1. Expand the scope of its climate change disclosures and targets to cover all relevant financial services;
  2. 2. Make sure that it has a strategy to reduce its financing of the fossil fuel activities it finances the most – such as fracking;
  3. Take action on fossil fuel expansion.

Otherwise, it might face another shareholder rebellion at its 2023 AGM.

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