Amundi - Corporate Social Responsibility Report 2016

Economic, social and environmental information Act as a responsible financial institution

A FORMALISED ENGAGEMENT POLICY

our desires as a responsible investor in regard to the topics presented at the general shareholders’ meetings. It is structured around a formalised system ( e.g. : pre-alerts before the general shareholders’ meetings) and enables greater transparency, additional commitments, and changes to, or even the discontinuation of, some of the Company’s practices. In 2016, this engagement involved 240 issuers through alerts and dialogues initiated by the companies.

Amundi’s engagement policy has three aspects: engagement for influence, data collection for rating purposes, as well as voting at general shareholders’ meetings and the pre-meeting dialogue. It is an essential component of Amundi’s fiduciary responsibility and its role as a responsible investor. Engagement for influence Amundi has a policy committing it to influence specific issues, helping companies move towards better practices. Since 2013, the ESG analysis team has been particularly active regarding six topics. The ESG analysis and Corporate Governance teams publish this work in an engagement report, available at www.amundi.com. In our fourth engagement report, we took stock of the dialogue initiated with companies regarding the topics introduced in 2013 and 2014: p respect for Human Rights in the mining and petroleum industries; p combatting food waste in the agrifoods and retail sectors; p the environmental impact associated with coal in the Utilities sector; p child labour in the cocoa and tobacco industries. In addition to these, we support international collective shareholder initiatives (see Section 3.1.3.3.). Data collection for rating purposes To refine the ratings given by the ESG analysis, the extra-financial analysts meet with companies throughout the year. These are selected based on the fraction of equity owned by Amundi and the relative size of the holding in the portfolios or in the benchmark indexes. In 2016, Amundi’s extra-financial analysts met with 205 companies. Starting in 1996 we have adopted our own voting policy, updated yearly, that incorporates environmental and social criteria. We exercise our voting rights in the general shareholders’ meetings of the companies our portfolios have invested in. Our voting policy (1) meets a three-fold objective: protect the interest of shareholders, formalise and make public our desires in terms of governance so as to facilitate dialogue with the companies and contribute to the effectiveness of corporate governance as a whole and thus to the efficiency of the markets. The shareholder dialogue consists of regular, constructive discussions with companies where we have the heaviest investment, highlighting p conflict minerals. We are introducing two new topics: Voting at general shareholders’ meetings and the pre-meeting dialogue

Voting campaign

2014

2015

2016

GSMs dealt with

2,576 2,565 2,623 31,237 32,396 32,771

Resolutions dealt with

Significant events in 2016 in terms of engagement The compensation issue was once again the hot topic of the 2016 voting season. Some countries experienced their first rejection of say on pay: Renault in France, BP in the United Kingdom and even Deutsche Bank in Germany. Nevertheless, beyond these high-profile cases, in which Amundi contributed to the debate, the transparency of compensation data, the practices and the quality of the dialogue with the companies showed improvement, particularly in France. This is reflected in a slight drop in our opposition arguments on this subject. However, the core of governance remains the proper functioning of the Boards, for which truly useful information remains limited, and objective indicators such as independence are still often insufficient. Companies are attempting to better highlight the role of their Boards in their documentation and useful information is increasingly filtering through via the results of Board evaluations. The main change in Amundi’s 2016 voting policy was the reassertion of the advantage of a direct dialogue between investors and the Board. This approach facilitates both better comprehension of the role and functioning of the Board and helps ensure that investors’ opinions effectively reach the Board. France remained slightly out of step with the growth of this trend in numerous countries. However, 2016 marked a turn and we were able to enter into direct communication with a much greater number of directors this year. Finally, the 2016 season was also marked by the commitment of shareholders to climate issues. In line with the 2015 resolutions at BP and Shell, supported by Amundi, we co-filed resolutions requesting additional information on the climate risk management strategies of Anglo American, Glencore and Rio Tinto, which were authorised by these companies’ Boards and approved by a wide margin in their general meetings. We also participated in initiatives on the same subject with ENI and Total, which resulted in the publication of additional information by these companies. Finally, we publicly announced our support for similar resolutions at Exxon, Chevron and AES, which however were not approved by their general meetings.

(1) A report on voting rights exercised and shareholder discussions, updated half-yearly, is available on the Amundi website (www.amundi.com).

14 AMUNDI - 2016 Corporate social responsability report