LOIM stewardship in 2024: focused on value creation

LOIM’s stewardship activities continued at pace and depth in 2024, with our corporate engagement and proxy voting activities focused on supporting investee companies transition toward more sustainable and resilient business models. Throughout the year, we built the foundation for a constructivist approach focused on themes and companies with which we can best support the creation and articulation of sustainable value.

Here, we provide an overview of our efforts – to explore LOIM’s 2024 stewardship work in depth, view our most recent annual stewardship report

A sustained focus on key engagement themes

We continue to align our stewardship work to our sustainability research and investment convictions. Based on our systems-change approach, our key thematic engagement topics during the year were the net zero, nature positive, socially constructive and digitally-enabled end-states of the sustainability transition. We also carried out cross-cutting engagements that supported to each of these themes, focusing on improving disclosures/ESG ratings, harmful companies, controversy management and corporate governance.

To ensure that our stewardship efforts create the desired impact, we update our engagement priorities on an annual basis. Our aim is to fulfil two long-term stewardship objectives: promoting alignment with the sustainability transition and supporting sustainable returns for our clients

“Our constructivist engagement approach aims to help companies articulate more clearly what they expect to excel at and highlight opportunities for sustainable value creation.”

Rebeca Coriat
LOIM Head of Stewardship

Engagement in 2024

We conducted 88 engagements with 82 companies in 2024. Of these, 61 engagements were individual and 27 were collaborative. We also submitted 115 requests for information, which document our dialogues with firms on extra-financial considerations, complement formal engagement efforts and inform our proxy voting activity.

The topic we engaged on most was decarbonisation, followed by biodiversity loss, controversies and corporate governance. During the year, 43% of engagements were closed, and among these 80% concluded with LOIM’s objectives being fully or partially achieved. Meanwhile, 15% were closed with objectives not achieved, and 5% were closed because we did not receive responses from the target companies. The majority of our engagements during the year – 57% – are ongoing. Figure 1 provides a breakdown of the engagements on a sector basis. 

FIG 1. Engagements per sector, 2024¹

55% of LOIM’s engagements focused on companies in Europe; 35% on firms in the United States; 9% on those in Asia; and 1% on businesses in South America. 

We continued to take part in a range of collaborative stewardship initiatives, including engagements, in 2024. We view  collaborations as a crucial tool to address systematic sustainability issues. Done well, they can be a powerful force for efficient and effective stewardship. 

“Companies are becoming more sophisticated in their reporting, enabling deeper conversations on strategies to adapt their business models and reduce their environmental impacts. Most remain very receptive to engagement efforts.”

Anouchka Miquel
LOIM Stewardship Analyst
(Engagement Lead)

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Voting in 2024

Exercising our proxy voting rights allows us to express our views on key issues affecting investee companies. Like our engagement work, our proxy voting strategy in 2024 was informed by our priority stewardship themes, with an emphasis on strong corporate governance. Our voting efforts focused on seven areas: corporate leadership, transparency, remuneration, share capital, shareholders’ rights, material sustainability risk and opportunities and shareholder proposals.

To increase the effectiveness of our proxy voting process, in 2024 we refined, expanded and updated the voting watchlists in order to focus our proxy efforts on specific subsets of our investee companies with which we were most likely to exert a significant impact. These firms included: our largest holdings, firms that were facing ESG-related shareholder resolutions, and companies that LOIM had already targeted for engagement.

The majority of our proxy voting activity in 2024 focused on US companies (699 meetings), followed by Japan (304 meetings), the UK (272 meetings), Switzerland (125 meetings) and China (111 meetings).

“The early inclusion of sustainability-related items in shareholder meetings has become an established practice. We view this as positive, as it gives shareholders a more powerful voice across the whole financial-sustainability spectrum.”

Natalia Galvan Dorado
LOIM Stewardship Analyst
(Proxy Voting Lead )

FIG 2. Vote breakdown on a per meeting basis¹

The issue on which we most frequently opposed company management was directors’ elections. This category made up 60% of all votes against management across 2024 (see Figure 3). The topic with the second most votes against was remuneration, which comprised 15% of all votes against.

Our main voting drivers on management resolutions were: non-independence of directors (as well as overall board independence); lack of diversity among directors; concerns over executive remuneration; and lack of alignment with net zero expectations.

FIG 3. Votes against by category¹

FIG 4. Shareholder resolutions category breakdown¹

As with management resolutions, our voting in shareholder resolutions was informed by a wide range of drivers. For shareholder resolutions in the social category – which we supported by a significant margin (see Figure 4) – these included the importance of socially constructive business models; improving equal pay and opportunities for employees; and the development and disclosure of ethical guidelines on AI usage.

FIG 5. Breakdown of management and shareholder resolutions voted by ESG pillars¹

Stewardship in action

The full 2024 Stewardship Report explores how engagement and proxy voting work is aligned and focused on our priorities. We provid a range of case studies, organised under two criteria and four priority themes:

First criterium. Stewardship tool used: engagement, proxy voting, engagement & proxy voting, together with supporting processes such as watchlists and escalation.

Second criterium. Stewardship theme: net-zero, nature-positive, socially constructive and cross-cutting themes.

Figure 6 summarises the themes and methods.

FIG 6. Stewardship actions by theme²

Progressing into 2025

Building on last year, we are working to deepen our constructivist engagement approach by focusing on select stewardship topics and industries where we are most likely to develop substantive, longer-term dialogues with companies that leverage our research insights. We are extremely conscious of the need for engagement to not merely connect firms with asset owners’ interests, but also to support a company’s internal dialogue and positive perception in markets.

By analysing sustainability topics through an investment lens, we aim to aid, not dictate, when engaging companies. Our goals include helping businesses to articulate more clearly what they expect to excel at in a net zero, nature-positive, socially-constructive and digitally-enabled world – and to highlight opportunities for sustainable value creation.