LUCRF Super stands up for workers’ rights at the Woolworths AGM

On Wednesday 21 November we voted at the Woolworths AGM, co-filing two resolutions (voted on at the meeting) with the Australasian Centre for Corporate Responsibility (ACCR). The two resolutions focused on improving workers’ rights and supply chain risk management.

Although the resolution was unsuccessful (with only 14.9% of votes in favour), more than 104 million votes were received – making it the highest ever number of votes in Australian history for a human rights resolution. The resolution was supported by a number of the world’s largest investors, including the US’ two largest pension funds CalPERS and CalSTRS as well as Netherlands’ pension fund service provider PGGM.

Chief Investment Officer Leigh Gavin said it was encouraging that Woolworths would take steps to monitor their suppliers in the future.

“This is a step in the right direction and we will continue to work with Woolworths, both directly and via other stakeholders, to monitor their supply chain practices, ensuring suppliers and their labour hire providers are complying with labour standards and, in turn, ensure workers’ rights are protected,” said Leigh.

We hope resolutions such as this encourages more corporates to take a pro-active approach to preserving human rights throughout their entire supply chain, not just at a direct employee level.

The timing of the resolution and discussion is also pertinent, with the Australian Parliament passing Australia’s first federal Modern Slavery Act on Thursday 29 November. The act will put measures to help stop the exploitation of workers and targets a range of exploitative practices including human trafficking, forced and child labour, and debt bondage. More than 40 million people worldwide are believed to be victims of modern slavery including 4,300 Australians, with half victims of debt bondage.

 

Why we vote at AGMs

When we invest in a company we become a shareholder. With this title we hold the power to vote on company or shareholder resolutions (or recommendations). We take this responsibility seriously.

As at 30 June 2018 LUCRF Super has voted at 1,327 company meetings, on resolutions that span management proposals, mergers and executive changes to polices that could have environmental impacts.

 “We vote at all annual and extraordinary general meetings for the companies we invest in,” Leigh remarked.

“Partnering with other stakeholders is key to bringing about change, which is why we co-filed the resolution with the ACCR.”

“The Woolworths resolution is just one example of our engagement approach and how we – as an active shareholder – can influence company policy and practices on behalf of members.”

 

What is shareholder engagement?

Shareholder engagement is about using your vote as a shareholder to influence a company’s behaviour, and often focuses on environmental, social and governance (ESG) issues. This could be voting against an unethical practice or policy or simply ensuring the company is being managed in our members’ best interests.

Talking on the topic, ESG & Investment Integration Manager Kevin Branton explained that it’s all about using our stakeholder position to influence companies for good.

“Being an institutional shareholder allows us to directly engage with companies and discuss our expectations and areas of concern on behalf of our members,” said Kevin.

“We believe taking an active ownership approach is a better way for us to ‘use our capital’ and position as a stakeholder -  if we divested [removing the investment from our portfolios] we would lose any opportunities to influence. As such, we use divestment sparingly and for a small handful of industries.”

With ESG issues an increasing area of interest for our members, we are growing this area of our business and now have a team dedicated to this topic. We look forward to bringing you more in-depth information in the future around active ownership, engagement, voting and, more broadly, our ESG work.