Ethos has published the summary reports of the Swiss and international Ethos Engagement Pools (EEP) for 2022. These reports present the dialogue activities carried out by Ethos with listed companies on environmental, social and governance issues. Detailed reports are however only available for members of each pools.
Ethos' shareholder dialogue programs continued to attract new members in 2022. The Ethos Engagement Pool (EEP) Switzerland, which focuses on the 150 largest companies listed in Switzerland, experienced one of the strongest growth rates in its history with 16 new members. It had 167 members at the end of 2022, with total assets under management of CHF 360 billion (of which CHF 41.2 billion invested in Swiss equities), up from 153 members a year earlier.
The EEP International, launched in 2017, passed the 100-member mark at the end of 2022, 23 more than a year earlier. With a total of CHF 286 billion in assets under management, it is the equivalent of the third largest pension fund in Europe, giving it influence in addressing environmental, social and governance issues with corporate management.
Climate, diversity and digital responsibility
EEP Switzerland's dialogue activities were again very active in 2022, with over 500 engagement actions with companies included in the engagement scope. In particular, Ethos continued to play a key role in the Climate Action 100+ initiative by leading the dialogue with Holcim and Nestlé, the two Swiss companies targeted by the initiative. Ethos also increased its involvement in the international campaign "Banking on a Low Carbon Future" by co-filing a shareholder resolution at the Credit Suisse general meeting to ask the bank to reduce its financing activities in relation to companies active in unconventional fossil fuels.
Ethos applied its new voting guidelines and opposed the re-election of the chairman of the nomination committee when the board had less than 20% gender diversity. Ethos also continued its dialogue with the largest Swiss companies to raise awareness on issues related to their digital responsibility (data processing, artificial intelligence, social and environmental impact of technologies, etc.). In this respect, a first study on their practices was published in January 2022 and a second in February 2023. Significant progress can be noted between the two studies with a doubling of the average score of companies.
Climate change also remained an important theme in the activities of the EEP International. At the end of 2022, a first direct engagement campaign was completed, targeting European electricity suppliers to encourage them to adopt ambitious climate strategies. Those companies have decreased their absolute CO2 emissions by 140 million tonnes during the commitment campaign, which is about three times the annual emissions of Switzerland.
On the social topic, the issue of artificial intelligence and digital surveillance and the challenges they pose for the protection of human rights has gained importance. In this regard, the EEP International members have supported an investor statement aimed at encouraging companies to anticipate and prevent the potentially negative effects of facial recognition technology on fundamental human rights.
Biodiversity, a new priority theme for EEP International
Following a proposal from several of its members, biodiversity has become a new priority theme for EEP International in 2022. It includes the protection of forests and ecosystems, the reduction of plastic and air pollution or the promotion of a circular economy model. A "Commitment Paper" specifying Ethos' expectations regarding the fight against deforestation was published and direct contacts with seven targeted companies were established throughout the year to discuss these expectations.