Voting spotlight
BP
At its capital market update on 26 February, BP announced a reset of its strategy. Given poor share price performance and evidence of an activist investor on the share registry, CEO Murray Auchincloss effectively abandoned BP’s previous strategic shift from an international oil company to an integrated energy company. Instead, BP announced it would re-focus on fossil fuels and scale down its renewables and low carbon energy programme. The company retained its aim of Net Zero by 2050 but reduced its aims of Net Zero from sales and Net Zero from operations by 2030. Our conclusion: the ambition and credibility of BP’s energy transition strategy has declined, and its scope for creating shareholder value is now more contingent on oil and gas prices and the company’s discipline in executing projects.
Investors’ lack of faith in a company’s ability to deliver on its strategy is often reflected in the share price. And BP’s share price has lagged its peers and the market, raising concerns for shareholders – not least about where responsibility for this underperformance lies.
It may be attributable to past decisions on capital allocation to renewable energy at the expense of the traditional oil and gas segment, to market perceptions of its corporate strategy and to leadership.
We decided to vote against the re-election of the chair and two independent non-executive directors (NEDs). This was despite BP’s announcement that the chair would step down after an orderly search for his replacement and the two NEDs, given their tenure, would rotate off the board in due course to maintain majority independence.
We felt certain directors should be held accountable. And they were the three longest serving NEDs, having held board seats throughout the appointment and departure of former CEO Bernard Looney and the failed strategic shift to an integrated energy company, which created neither shareholder value nor a sustainable transition pathway.
ALPHABET
Alphabet continues to attract several shareholder resolutions, with an increasing focus on the governance and oversight of artificial intelligence (AI) as well as broader social issues.
As in 2024, there were 13 shareholder resolutions on the slate at the 2025 AGM. We supported shareholder requests for additional disclosure on the company’s ability to meet its 2030 climate goals, the risks of improper use of external data in the development of AI products, and the impact of AI driven targeted advertising on human rights. We also voted in favour of both the recapitalisation plan for all stock to have one vote per share and the adoption of metrics evaluating child safety policies for YouTube.
We did not support proposals calling for the right to act by written consent, the adjustment of executive compensation metrics for share buybacks or the ending of Alphabet’s participation in the Human Rights Campaign’s Corporate Equality Index.
We also voted against reports on lobbying and child safety online, the risk of discrimination in generative AI and discrimination in charitable contributions. Our research found that Alphabet’s existing disclosures adequately outline its perspective on online child safety and the principles guiding the relevant legislation. The company also specifically references the potential risks related to generative AI bias in its reports, recognises bias as a potential limitation and explains how its policy guidelines contribute to training its AI models and avoid generating problematic responses. In addition, we believe Alphabet’s current reporting and policies on its charitable partnerships and risks related to discrimination provide sufficient information on its board’s oversight.
RIO TINTO
In line with the recommendations of both management and Institutional Shareholder Services (ISS), we elected to approve Rio Tinto’s Climate Action Plan. Although the company faces sector wide challenges as a major player in the extractive sector mining for metals and minerals such as iron ore and copper, Rio publishes a thorough greenhouse gas (GHG) emissions footprint and has set Scope 3 targets. The company also clearly states that its Scope 1 and Scope 2 emissions targets are not derived using a sectoral decarbonisation approach but were externally assured as aligned with the goals of the Paris Agreement. Rio provides disclosures on the key elements outlined in our climate strategy checklist.
As Rio is listed on both the UK and the Australian exchange, we supported a shareholder proposal requesting the company to conduct and publish an independent review into possibly unifying its dual-listed structure into a single Australian-domiciled holding company.
Whilst we acknowledge a third-party report suggesting unification may add value, we also take into consideration a board-sponsored review which suggests unification would destroy value. The board regularly evaluates options to maximise sustainable value for all Rio Tinto shareholders. Given the differing views, we believe it is important to signal to the board that it should publish additional information, including key assumptions made, supporting retention of the status quo, and the factors that would need to change for a potential unification.
BANK OF AMERICA
At the 2025 AGM, we supported management in ratifying named executive officers’ compensation. In doing so, we went against the recommendation of ISS, because we consider the compensation to be aligned with the wider industry and are comfortable with the level of discretion available for short-term incentives. We also supported a management proposal to amend its omnibus stock plan, as we believe wider share ownership brings benefits and the company appears to be disciplined with its expenses over the long term.
This year, four shareholder proposals were on the slate. We voted against a proposal to require more director nominations than open seats and against a report on climate lobbying. We also opted to vote against a shareholder proposal for a report on board oversight of material risks related to animal welfare. Whilst we share some of the proponent’s concerns on animal welfare in industrialised food production, particularly anti-microbial resistance and human health, we consider the current board oversight sufficient.
The Corporate Governance Committee receives input from the Responsible Growth Council, and the Enterprise Risk Committee oversees the company’s risk framework, including environmental and social risks. Overall, we believe this level of oversight should give shareholders comfort that the board and management are aware of and can manage the company’s risk exposures in this area.
Finally, we voted in favour of a shareholder proposal calling for the company to disclose its clean energy supply financing ratio (CESF), a measure which Bloomberg New Energy Finance developed to help banks calculate their ratio of low carbon to fossil fuel banking activity. We are aware Bank of America supports low-carbon energy sources through its lending, investments, products and services and has developed financing solutions to support the clean energy transition. However, several peer banks have published a CESF, and we would urge Bank of America to follow suit and make the ratio available as part of its reporting.