ERAFP updates ESG and climate voting guidelines

March 14th, 2024

France’s public pension fund Établissement de Retraite additionnelle de la Fonction publique (ERAFP) has updated its voting policy guidelines covering the evaluation of ESG and climate data.

The guidelines now recommend a vote against the appointment or renewal of auditors where there is deemed to be a violation of shareholders' interests with regard to ESG and climate factors.

ERAFP also said it would assess the new obligations of statutory auditors, notably where they are responsible for validating the climate data provided by the company in accordance with the Corporate Sustainability Reporting Directive (CSRD).

At a recent meeting, the ERAFP board of directors committed to deepening and enriching its obligations and will focus, in terms of shareholder engagement, on the fight against climate change in 2024.

It said it would focus on the promotion of strategies consistent with the objectives of the Paris Agreement and the fight against tax optimization practices by promoting increased transparency.

The board also said it will integrate the new theme of biodiversity by promoting policies and strategies integrating these issues within portfolio companies.

The pension fund said that, as a long-term investor, it had “a duty to act in the long-term interests of the beneficiaries of the public service additional pension scheme”.

Alongside the change to voting on auditors, the pension fund also strengthened its requirements to confirm external resolutions and Say on Climate resolutions will be assessed based on ERAFP's commitments, translated by its fossil fuel and climate policies.

The new guidelines also state that for companies operating in a sector with big climate challenges, director, supervisory board member, or chief executive officer reappointments may be evaluated using an identical grid of criteria to the methodology for analyzing climate-related resolutions.