21 November 2022
An Aware Super member sent a legal letter to the fund last week, raising concerns that Aware failed to understand and properly consider its vote on a crucial request for climate action at the recent Commonwealth Bank annual general meeting and demanding answers from the fund.
Aware Super voted against a critical climate-related shareholder resolution put to Commonwealth Bank at its annual general meeting (AGM) last month. The resolution – which requested CommBank disclose information on how it will not provide finance to any new or expanded fossil fuel projects – was voted against by Aware Super on the understanding that the bank must cease financing of all fossil fuel companies.
This error could have big implications for Aware Super’s members and the fund’s approach to climate action, as Aware Super will be voting on similar requests at the other three big Australian banks in December.
Members of Aware Super have written to Market Forces voicing their concerns that their fund did not properly consider this voting decision, and may not do so for critical climate-related voting decisions in the future.
Equity Generation Lawyers has written to Aware Super on behalf of the member, Meredith, requesting information on how the fund came to its voting decision and what policies, processes and disciplinary steps the fund has in place to try to prevent mistakes like this.
Aware Super members: Take Action
Join this action by submitting your own request for information from Aware Super.
What is proxy voting?
As a shareholder in thousands of companies worldwide, your super fund has the right to vote on items of business at the annual general meetings (AGMs) of all of those companies. Issues that are voted upon include director elections, remuneration packages and takeover provisions. Advisory resolutions raised by groups of individual shareholders can also be subject to a vote.
What are shareholder resolutions?
Shareholder resolutions are formal proposals put forward by a group of shareholders to guide a company’s actions. They are included as an item of business to be discussed and voted upon at a company’s AGM. All shareholders, including large investors like superannuation funds, then have the opportunity to vote for or against the resolution (or they can abstain or elect not to vote).
Resolutions are used by shareholders in an attempt to improve the performance of companies, often in relation to sustainability issues, like climate change. Generally, shareholder resolutions require the support of more than 50% of shareholders to pass, and are generally non-binding on the company. In the United States, shareholder resolutions form part of the regular process of engagement with companies. In Australia, however, our Corporations Law combined with most company constitutions do not presently allow shareholders to propose advisory resolutions unless accompanied by a separate resolution to change the company’s constitution. Resolutions proposing changes to a company’s constitution require the support of 75% of shareholders to pass.
To learn more about shareholder resolutions, head over to our shareholder action page.