2021 AGM Roundup 2: 28 June – 25 August 2021

Just Share has attended the following virtual annual general meetings (AGMs) since 28 June 2021 (and since our AGM Roundup 1):

  1. Pick n Pay Stores Limited: 28 June
  2. Ninety One Limited: 4 August
  3. Investec Limited: 5 August
  4. Naspers Limited: 25 August
  5. Mr Price Limited: 25 August

We asked a total of 18 questions relating to inequality (wage gaps and income inequality), diversity and transformation, climate change, and related governance issues, and we have produced a full transcript of our questions and the companies’ responses.

Investec’s 2021 AGM a major improvement on 2020

Subsequent to criticism by Just Share of Investec Limited’s 2020 virtual AGM, the group’s company secretaries engaged with us to outline the difficulties they had experienced in hosting a virtual AGM for a dual-listed company, and to discuss ways in which the 2021 AGM could be improved. We commend Investec for its efforts to ensure easy access for and participation by shareholders at its 2021 AGM.

Pick n Pay confused on climate

Pick n Pay’s climate change-related reporting is extremely confusing, and the board and executives were unable to satisfactorily answer our questions about it. For example, we asked when the company would make public the “climate change strategy” and its “low-carbon transition plan”, mentioned repeatedly in its public reporting, but not available anywhere that we could find.

In response, we were told that the company’s Sustainable Living Report 2021 (which had been released either on the day of, or the weekend preceding, the Monday morning AGM), “provides all the details of our work and strategy on climate change”. However, neither the strategy nor the transition plan appear in the Sustainable Living Report.

The company’s chief strategy officer was also unable to articulate clearly why Pick n Pay’s integrated report, sustainability report, and CDP report give different figures for emissions in the same year.

Pick n Pay also states in its reports that six of its 14 directors have “relevant climate change experience”. However, none of the biographies of these directors, nor a search of publicly available information on their experience, mentioned any climate relevant expertise. When we asked the board for clarity, Chair Gareth Ackerman said: “I think a very good point and if we are going to make a claim like that, we should be able to justify it. We will add that in the future if we are going to make claims like that. Good point, I think we must deal, we will deal with it.”

If the company cannot justify the claim, this constitutes a serious misrepresentation to shareholders.

Naspers’ board’s ESG competence

Naspers’ corporate reporting is jammed full of unsubstantiated boasting about its sustainability credentials, including the slogan “sustainability is at the core of what we do”. However, the Naspers board of directors has extremely limited environmental, social and governance (ESG)-related qualifications and experience. We asked whether, given the scale and scope of the sustainability challenges facing major corporations, Naspers plans to appoint any independent non-executive directors with specialised ESG-related credentials.

Chair Koos Bekker responded flippantly: “best person to answer that is the Chair of the ESG committee, who happens to be a Professor of Science, so Debra, are you unqualified?”. (Debra Meyer is professor of biochemistry and executive dean of the Faculty of Science at the University of Johannesburg. These are impressive credentials, but they do not mean that she is an ESG specialist).

Although Meyer stated that, “a large number of our board directors already have great competence in ESG matters”, this competence is not evident in the directors’ biographies. Meyer also said that, “the board has exposure to training as necessary, so I think we are more than competent to address ESG matters for Naspers”.

The fact that the Chair of Naspers considers a board member to be an ESG expert simply by virtue of the fact that she is a scientist – with specialist knowledge in largely-unrelated topics –  and that the chair of the social, ethics & sustainability committee believes that “training” is sufficient to ensure sustainability competence at a governance level is, contrary to the group’s assertions, indicative of a laggard’s approach to ESG matters.

Key commitments made in response to Just Share questions:

  • David North – Chief Strategy Officer, Pick n Pay Stores Limited: “we will consider that request [to release a stand-alone TCFD Report] for more direct disclosure, as it were, in the coming months.”
  • Hendrik du Toit, Chief Executive Officer, Ninety One Limited: “by and large, we will not support new coal or fossil fuel – coal specifically – power plants. And we are not in the business of financing them directly, but where we are invested in large commodity or in large businesses which may use some additional coal, we cannot make that very clear statement that we will never, have indirectly been involved in the financing of some coal, that’s not why we don’t say it, but in general, in principle, we don’t want new coal facilities to be opened”.
  • Fani Titi, Chief Executive, Investec Limited: “this is not a non-conditional commitment to fund Karpowership. We have given the guarantee subject to further processes on our side, both environmental and governance sides.”
  • Philip Hourquebie, independent non-executive director and Chairman, Investec Limited: “it [reporting gender pay gaps] is something that we can consider and will consider. We will be considering how we improve our reporting going forward and we will certainly take this thought forward with us, and consider from the point of view of including it, and ensuring that we have got the right base information to be able to do that. So it is certainly something we will consider.”
  • Prajna Khanna: Global Head Sustainability, Naspers Limited: “next year we will continue to encourage all of the entities [companies we have financial control over], to be more granular and to increase the quality of their disclosure on their Scope 3 footprint, as we will do for ours.”
  • Nigel Payne, Chairman, Mr Price Group Limited, in relation to the reduction of emissions in line with the goals of the Paris Agreement and signing up to the UN Climate Change’s Fashion Industry Charter for Climate Action: “I can give you the commitment of the Group that we will select an appropriate metric to adopt to report against and will set appropriate targets.”
  • Nigel Payne, Chairman, Mr Price Group Limited: “it’s definitely on our agenda [to reduce scope 3 emissions], to work backwards through our supply chain, to the extent that we have visibility on it and to establish and work against performance targets.”
  • Mark Bowman, Chairman of the Remuneration Committee, Mr Price Group Limited: “we are busy at the moment with a process where we move from a system, an internally-devised benchmarking system [to establish pay disparity] to the Paterson grading system, which is the standard – or one of two standards – and will finish this process in the next few months.”
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