Allianz Global Investors has said it will vote against European large caps that do not include ESG criteria in executive pay agreements.

The firm says it expects European large-caps to include ESG KPIs in executive remuneration policies and will vote against pay policies in 2023 if this is not included. It has also strengthened its voting rules on ethnic diversity in the UK and US and says it expects companies to have a diversity approach beyond gender.

AllianzGI voted against 47% of all compensation related management proposals during 2021 and amended its Proxy Voting Guidelines on generous pay proposals. These relate to companies receiving substantial direct state aid, substantial lay-offs or reduced dividends as a result of the Covid-19 pandemic.

Matt Christensen. Global Head of Sustainable and Impact Investing at Allianz Global Investors, says, “As an active investor, exercising our voting rights is one of the most powerful tools we have to effect change. In keeping with our desire to shape a more sustainable future with measurable positive outcomes, we want to ensure that our investee companies align their executive remuneration policies with ESG KPIs and we will vote against those that don’t. “