Ethos, Novartis at Odds Over Swiss Voting Law

Pharmaceutical company Novartis will be allowing shareholders a consultative, rather than binding, vote on its sustainability report – a move which the Ethos Foundation has argued is “contrary to the spirit of [Swiss] law and the interests of shareholders”. As of this year, Swiss-listed companies have been mandated under Article 964 of the Swiss Code of Obligations to allow shareholders to vote on their sustainability reports. The Ethos Foundation, which was created by Swiss pension funds to enable them to invest according to sustainable development principles, has claimed “there is little doubt” that Novartis’ report must therefore be submitted to a binding vote. When contacted by the foundation, Novartis said that the sustainability report documented its sustainability strategy, and that as such – it was a duty of the board of directors that could not be delegated to the annual general meeting (AGM). The Ethos Foundation has called on Novartis to rectify the situation by submitting the report, as well as any future sustainability reports, to a binding vote. “A consultative vote does not carry the same weight or have the same significance as a binding [one],” said Ethos CEO Vincent Kaufmann. “This decision is totally incomprehensible and goes against the spirit of the law, Novartis’ articles of association and the interests of shareholders.” Novartis’ next AGM is scheduled for 5 March.

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