Stewardship Report 2022
Executive summary

Active stewardship and sustainable investment

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For more information on the financial terms used in this page, please consult the glossary.

In this summary we detail some of the actions and initiatives that we have been involved in over the past year, highlight a number of our engagement and voting activities, and provide examples of our numerous interactions with external parties. We hope that it provides insight into our activities as an active, responsible investor.

The value of a fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested. The information provided should not be considered a recommendation to purchase or sell any particular security.

Engagement and voting in numbers


Company meetings attended by our Equities team


Meetings attended by Stewardship & Sustainability team


ESG engagements

Stewardship & Sustainability team meetings by issue covered

Source: M&G, 2022

ESG engagements

Near the end of 2021, we developed a system to more effectively track ESG engagements. By this we mean an interaction with a company which seeks a change in company behaviour or improved disclosures, rather than to increase understanding.

Over the course of the year, we recorded 197 ESG engagements with 134 companies, broken down in the tables below. The full list of recorded engagements can be found in Appendix 1 at the end of the full report.

Recorded ESG engagements by broad pillar (%)

Recorded ESG engagements by outcome (%)

Recorded ESG engagements by meeting type (%)

Recorded ESG engagements by broad pillar (%)

Source: M&G, 2022

Recorded ESG engagements by geography (%)

Source: M&G, 2022



Company meetings voted at


Percentage of eligible meeting voted at


Meetings where at least one management voting recommendation was not supported

Meetings where at least one management recommendation was not supported 

Source: M&G, 2022


Our main areas of focus this year have been climate, diversity & inclusion, and developing our thinking on biodiversity and modern slavery. 

Under our commitment to the Net Zero Asset Managers Initiative, we have undertaken to assess or engage with companies representing 70% of our financed carbon emissions, to help ensure these companies are aligned with the Paris Agreement on climate change.

In 2022, we updated our methodology for generating our ‘Hot 100’ list – a targeted engagement list, based on highest emissions and largest M&G Investments-wide exposure. As at the end of December 2022, we have assessed or started the engagement process with 56 companies, and planning is underway for those remaining. We have also continued to engage actively through the Institutional Investors Group on Climate Change (IIGCC) and collective engagement initiative Climate Action 100+ (CA100+).

Our forward-looking Thermal Coal Investment Policy was implemented in April 2022 and, broadly, requires investee companies involved in thermal coal in EU and OECD countries to phase out of coal by 2030, with those in non-EU and OECD countries required to phase out by 2040. The full policy can be found here. While companies with no plans to phase out coal were the subject of divestment, there were a number of companies where phase-out plans were unclear or non-existent, or they did not appear to meet our expectation in terms of timing by 2030. As a result, a number of time-limited divestment exceptions were provided and we undertook to engage with those companies. This resulted in nine new engagements in 2022, with a number to come in 2023 (in addition to the 18 coal engagements that took place in 2021).

Having joined the Taskforce on Nature-related Financial Disclosures (TNFD) Forum in 2021, we were hoping to be able to report more progress than we actually made in 2022. We were largely held back by a lack of relevant data and limited resources, but despite this we managed a handful of engagements on this critical topic during the year. In 2023 we are aiming to extend our climate engagements to include biodiversity where it is relevant.

Of note, it has been announced that the IIGCC will be the secretariat for the new Nature Action 100 list of priority companies, which will emulate CA100+, and we hope to be active participants in this. Meanwhile, we continue to co-chair the Natural Capital Committee for the International Corporate Governance Network (ICGN), the main initial responsibility of which was to publish a viewpoint article on how investors should start thinking about biodiversity.

Near the beginning of 2022, we published our expectations for board-level diversity at investee companies, and wrote to over 1,200 of them explaining those expectations. Later in the year, we also compiled a list of some 200 laggard companies which did not meet our requirements, and we will be focusing our diversity engagement efforts on these into 2023. In light of those minimum expectations, we voted against directors at 24 UK companies and 254 international companies that were failing to meet them.

Example 1

AES – coal divestment

Status: achieved

Objective: To request that US-listed AES, a world leader in renewables development, which also owns and operates a legacy fleet of coal-based generation assets, phase out coal by 2030.

Action: We have had constructive multi-year engagement with various AES representatives, dating back to 2017.

Outcome: One of our investment strategies – with ESG-related exclusions in place – has followed AES since 2017, but could not invest at the time due to the company’s significant exposure to coal generation assets. Over the following years, AES made significant progress to phase out coal, and we observed this progress very clearly by way of the large number of coal divestments and closures announced by the company. In 2020, we revisited AES’s coal exposure and determined that it no longer exceeded our limits (at the time). Following a call with the company’s chief executive in June 2020, we became more confident in AES’s transition goals.

From June to July 2020, we worked with internal oversight bodies to review the coal exposure and the transition progress of AES, and, ultimately, we were able to ascertain that the company was a suitable investment due to its progress and strong sustainability credentials.

After becoming shareholders of AES, we hosted another follow-up call with the chief financial officer in September 2020, and used this occasion to encourage the company to accelerate its phase out of coal-fired generation. In summary, we re-emphasised our view that making rapid progress on coal phase-out was very important. Our view was acknowledged, and the company confirmed that a coal phase-out was the right strategy going forward. The CFO also confirmed AES would continue to find ways to accelerate coal phase-out, while at the same time allocating capital to renewable and utility assets. Its target at the time was to bring coal generation to below 30% by end 2020, and below 10% by end 2030.

Nonetheless, continued engagement and oversight of AES’s execution and ambitions was critical. Following the publication of our Thermal Coal Policy, we followed up with the company in September 2021 to reiterate the importance of a clear and public phase-out policy. The company confirmed its intention to have no involvement in coal-based power generation after 2030.

In January and February 2022, the investment team and M&G Investments’ Coal Committee began a re-assessment of AES’s ambitions, to ensure investment in the company was still appropriate under our Thermal Coal Policy, which was due to come into effect in April. The Committee granted AES an exception until April 2023, in light of continued constructive engagement and clear progress towards phase-out.

Only weeks later, in February 2022, following negotiation with regulatory bodies on energy security, AES announced a new and more ambitious target to exit all coal involvement by 2025, backed by significant and credible investments in clean energy and innovative technologies. This public announcement meant AES no longer violated the Thermal Coal Policy, and we think was a clear demonstration of the power of long-term, active ownership.

Example 2

Nestlé – biodiversity, plastic packaging and forced / child labour in its supply chain

Status: achieved

Objective: To encourage global food and beverage company Nestlé’s plastic packaging initiatives, and to ensure it was adequately taking account of both deforestation and forced / child labour in its supply chain.

Action: We met with the company's global lead, social impact and a member of the investor relations team.

Outcome: Overall, we were very impressed with the company’s efforts. In plastic packaging, it is really investing in, and looking for, solutions to plastic waste, e.g. paying a premium to recyclers to drive the industry and establishing a plastics R&D centre. The company will miss its 100% reusable or recyclable plastic by 2025 target, but this pertains to most of the industry due to lack of recycling capacity.

In terms of biodiversity, the company has monitoring systems in place and is driving a regenerative agriculture initiative, to help meet its goal of 100% deforest-free supply chains by 2025. It acknowledges that this is not an easy feat, but appears to be doing the right things and moving in the right direction. We liked how Nestlé also linked its biodiversity targets with social considerations – small-holder farms often cannot be monitored for deforestation, or it happens outside of their control. Nestlé doesn't remove them from the supplier list, as it is aware of the social impacts this would have, and therefore works with them to help avoid future instances.

Further, it is very engaged on the issues of child labour, recognising that this is a common factor in long supply chains, but is monitoring and actively on the ground, working with communities to address the key issues. This is house-by-house engagement, with good remediation work in place where instances are discovered. We will follow up with the company in 2023 to carry on the discussion to include nutrition and climate.

Example 3

SolarEdge – gender diversity

Status: ongoing

Objective: To encourage US-listed solar energy specialist SolarEdge to increase the gender diversity of its board, to declassify the board and move to the annual re-election of directors, and to reclassify a director with 16 years’ tenure as non-independent, as well as removing him as chair of the remuneration committee.

Action: Ahead of SolarEdge’s AGM, we met with the company’s general council at her request. She was seeking our support for the election of an existing board member, which was recommended against by ISS, given the classified board structure.

Outcome: The board member in question is one of two females, and a supporter of changing to a non-classified structure. The company confirmed that, following repeat shareholder requests, it was making the move to declassifying. It also confirmed that an additional director was being added to the board, and both candidates for the role were female. In terms of the long-tenured independent director, the company understood our request, and would raise the issue with the board. The director was one of the company’s original seed investors and brings a wealth of knowledge, which we see of obvious value – but have difficulty with the independent classification. We will follow up in due course.

Example 4

UniFirst – board refreshment

Status: not achieved

Objective: To encourage board refreshment at US workwear and textile service business UniFirst.

Action: We met with the company’s chief financial officer to make our expectations known.

By way of background, three non-executive members of UniFirst’s seven-member board, who are considered ‘independent’, are over the age of 75 with tenures of 14, 15 and 22 years. We would not consider these board members as independent given their tenures. We also questioned the need for the company to maintain a classified board, encouraging annual election for all members, as well as encouraging greater board diversity.

Outcome: UniFirst confirmed that other investors had shared similar concerns, but that it did not currently have plans to publicly announce board refreshment. The CFO did take our points on board, however, saying he would raise the issue with the board, and suggested we write a letter outlining our concerns to add credence. We subsequently wrote to the board chair, including an additional request for disclosure of workforce diversity at management level, as well as mentioning our position on the company's dual share structure (also mentioned in the meeting). The chair politely rebutted most of our suggestions, and after the reporting period we voted against both him, and another long-tenured director, at the company’s AGM.

When considering how to vote, we take into account our policy and opinions expressed by members of the S&S team, investment analysts and investment teams. Here we highlight a number of key themes that influenced our voting decisions over the past year across different regions. 

A key voting focus for us throughout 2022 was board gender diversity. During the year we voted against board directors at 24 UK companies and more than 200 US companies, among many others, due to not meeting our minimum expectations on board gender diversity. We typically targeted our voting at nomination committee chairs (who often are also the board chair) and will vote against all companies that fail to meet our voting policy unless there are extenuating circumstances.

In the UK, examples of companies where we voted against the nomination of the chair included Frasers Group, Ocado and Spire Healthcare. In Europe, following a letter to Irish insurance company FBD Holdings, we decided to vote against the chair, who is also chair of the nominations committee.


2022 saw a record number of shareholder resolutions in North America, with climate change at the heart of this stakeholder advocacy. We have been supportive of resolutions asking companies for enhanced disclosure around decarbonisation, transition plans and emissions target setting. However, we have been wary of supporting resolutions we consider to be overly prescriptive, too narrowly focused or otherwise potentially harmful to shareholders.

One instance where we believe more can be done in terms of climate change risk mitigation was at membership-only retailer Costco, where we supported a shareholder proposal requesting that the company adopt short, medium and long-term emissions reduction targets. The proposal received overwhelming support, with almost 70% of votes cast being supportive.

In the UK, we supported the majority of company climate plans and deemed they were appropriately stretching. However, we did vote against miner Glencore’s climate plan, given concern around thermal coal activities and the legitimacy of the glide path proposed.


In the US, various remuneration issues, including severance arrangements, special awards, use of discretion and inadequate disclosure, resulted in us opposing a number of ‘Say on Pay’ votes at US companies. For example, at game developer Take-Two Interactive, where we did not consider the targets for the year in review to be sufficiently challenging. Occasionally, when we find pay practices to be particularly concerning, we will consider opposing the chair of the remuneration committee, which we did at online travel company Expedia, whose chief executive was awarded equity grants in excess of USD$300 million without sufficient justification.

In Europe, Akzo Nobel, the Dutch paints and coatings company, disclosed a one-off restricted share grant to the chief executive. We considered this as unjustified and led us to oppose the resolution to approve the remuneration report.