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AUM in Action

Railpen Introduces Voting Sanctions for Late Payers  

UK pension giant Railpen will consider voting against the report and accounts and/or executive directors at UK companies which have consistently paid their suppliers late for the past five years, as part of its global voting policy for 2024. The move reflects a growing body of evidence demonstrating the financial materiality of a company’s treatment of its key stakeholders, said Railpen, which manages assets worth £34 billion. Other new voting policies introduced for next year include voting sanctions on new company IPOs with dual class share structures and a sunset clause of more than 20 years from the date of the IPO. Railpen will also expect companies to use International Sustainability Standard Board disclosure requirements on sustainability- and climate-related risks as a minimum. It has strengthened voting lines on how companies both disclose their approach to just transition considerations and implement climate transition strategies that better manage the risks and opportunities arising from a just transition. Caroline Escott, Senior Investment Manager at Railpen, said: “Although policymakers in the EU and the UK may be considering a “race to the bottom” on corporate governance standards, in 2024 we will continue to use our voice to advocate for the strong shareholder rights and effective corporate governance, which ultimately benefit both investors and companies. Shareholder protections and robust standards are fundamental to sustainable value creation – and a policy debate which pits essential corporate governance against thriving economies is not only inaccurate but also counter-productive.” 

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