Insurer gives investors a say on its reportingJuly 2010
Insurance giant Aviva has become one of the first companies to put its annual corporate responsibility report to a shareholder vote.
Shareholders endorsed Aviva's CSR report in one of 22 resolutions at its annual meeting. They decided to 'receive' the report on a vote of about 3000 to one, though the resolution did have more votes withheld than any others at the meeting, and 30 times more than the annual report.
The multinational insurer, which made a profit of more than £2billion ($2.95bn, €2.4bn) last year, says the decision, announced in November, was made mainly to ensure that shareholders know - that is, have read - what the company is doing on CSR and give them a chance to comment on its activities.
Many investors demand similar measures from companies, but have yet to install them in their own operations. Aviva Investors, the insurer's asset management arm, may now use its influence - and the moral argument that it is practising what it preaches - to demand similar votes from other companies. Aviva has previously put pressure on companies to submit sustainability strategies to a vote at annual meetings, demanding greater engagement with shareholders on governance and corporate responsibility in some companies.
Aviva chairman Lord Sharman said: 'We're committed to promoting sustainable business behaviour and in doing so enhancing long-term returns to shareholders ... If you have a responsibility, you need to report your progress against that.'
Shareholders voted on the 11-page summary of the CSR report in the annual report rather than the separate document. The vote was only advisory, but if investors had rejected it the company may have been obliged to change the report, or even its entire CSR programme, depending on the reasons for rejection.
The report gives details of Aviva's corporate responsibility activities globally, in areas such as carbon reduction targets, combating bribery, its executive remuneration policy and its community programmes.
The vote is a first for a large company, although many businesses, including Apple and Tesco, have faced unsuccessful resolutions from pressure groups and trade unions that would commit them to producing their first CSR report or to improving existing reporting.
Companies on the Johannesburg Stock Exchange (JSE) will be expected to produce an integrated annual financial and sustainability report under rules that took effect last month.
More than 450 listed firms will be affected by the change, which is aimed at encouraging them to publish a more thorough view of their social, environmental and economic performance along with their financial figures. The change applies to all end-of-year reports after February 2010.
However, an integrated report will not become mandatory.
JSE-listed companies can decline to produce one but will have to explain why.
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