As defined by the UK Stewardship Code, stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries. Through direct and collaborative engagement, we seek to encourage companies to adopt sustainable practices that benefit the economy, environment and society, on which returns, and client interests, depend.
At LGT, we see stewardship as a core responsibility, central to how we manage capital on behalf of our clients and society. Through active ownership, informed proxy voting, direct company engagement and collaborative initiatives, we aim to protect long-term value and promote sustainable business practices, while addressing systemic risks that could undermine financial, environmental or social sustainability.
Our stewardship strategy focuses on four key themes:
We engage with companies in our clients’ portfolios to seek to improve labour rights, working conditions and diversity and inclusion. Companies that proactively manage these issues should be better positioned to attract talent and mitigate operational, financial as well as reputational risks while maintaining investor trust.
LGT’s own long-standing reputation as a responsible employer extends to its supply chain and investee companies. We are a supporter of the UN Guiding Principles on Business and Human Rights1 and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.2 In line with these frameworks, we expect our investees to uphold the same principles on human and labour rights, and we promote stronger work practices, particularly in areas such as health and safety, through engagement and ongoing dialogue.
One recent example of our stewardship approach in action is our support for a shareholder proposal filed by investor Tulipshare Ltd at Amazon’s 2024 Annual General Meeting. The proposal requested an independent audit of the working conditions and safety at Amazon’s warehouses, which sought to address concerns about injury rates and the impact of Amazon’s productivity performance metrics – all very important issues for one of the world’s largest employers, with more than one million employees across 2,500 sites globally. For a company of this scale, poor safety outcomes can translate into operational disruptions, reputational damage and significant financial costs, issues that are material to long-term investors. Ensuring a healthy and safe workforce is also critical to Amazon’s productivity and retention, particularly in a labour-intensive business model that relies on high staff turnover.
Since 2019, Amazon has invested significantly in workplace safety, spending more than $2 billion, with their efforts translating into genuine progress.3 However, the proponent cited investigative reports that show Amazon’s employees still suffer higher injury rates than the industry average. Other reports have pointed to high employee turnover, estimated to cost the company $8 billion annually.4
This was the third consecutive year this proposal had been submitted, receiving noteworthy shareholder support each time. Although the resolution did not pass this year, we continue to monitor the alignment between the company’s disclosures and external reports. We consider the independent audit proposal a constructive way for Amazon to further address investor interests, demonstrate progress and enhance transparency.
Through continued engagement and proxy voting, whether we are addressing workforce issues, human rights or board-level social governance, we aim to encourage companies to become more transparent, resilient, socially responsible and aligned with investor expectations, thereby supporting lasting value creation and protecting the interests of our clients and beneficiaries. As the regulatory landscape and societal norms evolve, our stewardship efforts will continue to focus on driving measurable progress and supporting companies in navigating these challenges.
This case study, along with others, is explored in more detail in our 2024 Stewardship Report.
[1] UN Guiding Principles on Business and Human Rights
[2] OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (EN)
[3] Amazon’s 2024 workplace safety performance shows annual improvement
[4] Shareholder Proposal Statement (page 78-79): Amazon.com, Inc. DE
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