Page 11 - Ausbil 2024 Annual ESG Report

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Ausbil ultimately makes its own voting decisions, even though we are often supported by a proxy advisor. Even in cases where proxy advisors are recommending investors to vote ‘against’ a resolution, the same proxy advisor often admits that mitigating factors mean that ‘some investors may wish to support’. The Ausbil ESG team makes suggestions for all meetings where Ausbil votes in the S&P/ASX 200, and meetings outside of the ASX 200 for portfolio companies. Some of these may be different from proxy advisors if we do not think we can support a vote based on our ESG and sustainability assessment.
There were fewer abstain votes in 2024 than in 2023. This was because the ESG Team expanded its coverage to include more small and micro- cap stocks, providing greater opportunities to engage with the companies.
Looking ahead: 2025
As we head into 2025, several old and new ESG issues will likely dominate our focus. With political changes across the globe, especially with the inauguration of President Trump in the US, come a number of uncertainties that we will seek clarity on during the year. Already President Trump has announced that the US will exit the Paris Agreement, heralding what we expect to be a year of change. Following is a summary of what we can see as at the time of writing.
The pace of the energy transition
The pace of the energy transition depends on a number of drivers, such as: the demand for affordable and reliable energy; climate change targets and commitments; technology change and their commercial realities; and the changing political landscape.
Thedemandforenergy:McKinsey’sGlobalEnergyPerspective 2024 highlighted that global energy demand is projected to continue to increase and grow faster than expected (by 11% to 18% by 2050), not least due to new sources of demand such as AI. Most of this growth will come from emerging economies (for example, India, Pakistan, Bangladesh, Vietnam, and other Asian countries), where growing populations and a strengthening middle class will result in higher energy demand. The relocation of manufacturing industries from mature to emerging economies will further shift demand to these economies. In short, the global backdrop is one of robust demand for reliable and affordable energy.
In 2025, we will be paying close attention to capital expenditure on renewable energy technologies and engage with companies on progress against climate change targets set by individual companies
Annual ESG Report l March 2025
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