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[TOP INTERVIEW] Virtual AGMs and the question process, and banks’ funding of environmental policies

Just Share director Tracey Davies answers Simon’s questions emanating from previous discussions.

SIMON BROWN: I’m chatting now with Tracey Davies, a director at Just Share. Two points I need to pick up on that we’ve chatted on over the year. Tracey, good morning. I appreciate the time. Early in the lockdown we were talking around virtual AGMs and concerns, particularly around the question process, where questions could be changed, could be completely ignored, and all sorts of other matters, whereas in a real-world I’ll stand up, I’ll ask my question and there is no interference. Certainly, we saw reports out of virtual AGMs that were less than stellar. Your sense, if we look back more broadly? Was it as bad as it could have been? Did it largely work? What’s your assessment of virtual AGMs under pandemic conditions?

TRACEY DAVIES: Well, it’s been quite an interesting experience, I have to say. At Just Share, we’ve attended probably around 20 virtual AGMs since you and I first spoke. In some respects it’s been that some of our fears were realised, some of them weren’t, and in other respects, there were things that we just didn’t anticipate would be problematic that are problematic. As you say, the original main concern was about that kind of moderation. There were indications that questions were going to be moderated. 

I think for the most part, companies got the picture there; the language of the Companies Act is very clear. You need to be able to communicate without an intermediary. And we didn’t see, I think possibly with the exception of …… [NIDA ??] Investments, we didn’t see anybody actively trying to shut down or change or moderate, or get rid of uncomfortable questions.

So that was interesting, and that was good. And I do know that a lot of companies took legal advice on how to manage the question-and-answer process. So I’m glad that we flagged that right at the beginning because I think that contributed to it being better than we expected.

But where the real issue came up, Simon, was with this business of writing, typing questions into a box. Very few companies allowed oral questions, even though the technology now provides for you to do that. You can have the shareholders asking questions verbally. Most of them chose not to do that. And, first of all, there’s a word limit on the questions. Then they come up in funny orders on the screen. When they are read out by the company secretary, who has obviously never seen them before, often doesn’t read them out properly, and gives things the wrong emphasis. And then there’s no opportunity for kind of to-and-fro. The question will be answered, the board member will say, “Right, does that answer your question?” and then they move on. So it’s a very, very sterile form of interaction.

SIMON BROWN: Yes. And the technology is there, as we have learnt. Having a live voice is not fancy anymore. That really is old-school technology.

The other one I wanted to pick up on was environmental policies. You’ve been touching on it a lot during the year. We’ve spoken about it. I’ve chatted with some of the banks as they are sort of moving forward. My sense is that they’re kind of moving in the right direction, but it’s almost like they’re going to do the right thing, but really at the very last minute. Am I being unfair here – that they dragged their feet?. They know where they need to go, but they really don’t want it. It’s like trying to take a kid to bed, almost. They want to stay up longer.

TRACEY DAVIES: Yes, I think you’ve hit the nail on the head. We’ve got lots of policies now, as you say, around fossil-fuel financing, but for the most part, what those policies do is justify the banks’ existing practices rather than setting out a situation where they will [comply]. The whole point, of course, of having a fossil-fuel financing policy is to say, ”No, we won’t finance this,” or “We’ll phase out our financing for X, Y, and Z”. That we really are not seeing. 

There was a report released last week by a huge group of global NGOs around how the institutions that are most likely to stop us from achieving the goals of the Paris Agreement are banks because, for as long as banks will finance these incredibly destructive projects that we do not need, they’ll go ahead. There’ll always be someone who wants to build an oil pipeline or a coal-fired power station. And if they can get finance from the banks, those things will go ahead. So we’ve come leaps and bounds in the past two years in terms of disclosure. Some banks have had to be dragged, kicking and screaming. Otherwise, others have done it, I would say, in a very proactive way. But that is only just the tiny, tiny, first step. We’re nowhere near where we need to be if their financing activities are actually going to contribute to climate action.

SIMON BROWN: Yeah. So they are kind of moving in the direction, but they’re taking baby, baby steps. 

We’ll leave that there. Tracey Davies, director at Just Share, I appreciate your time and appreciate all the efforts you’re doing to keep the companies on their toes. All the best over the holidays.

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