Norges Bank Investment Management (NBIM), which is responsible for the investments of Norway's Government Pension Fund Global, has called for clarity on voting and reporting in response to the International Corporate Governance Network’s (ICGN) consultation on its Global Stewardship Principles.

In a letter sent to the ICGN, NBIM chief governance and compliance officer, Carine Smith Ihenacho, and NBIM head of policy engagement, Elisa Cencig, said the fund welcomes the revision of the ICGN Global Stewardship Principles, particularly to make the principles “more succinct and cohesive, as well as the additions referring to the importance of reliable data and globally harmonised corporate sustainability reporting and assurance”.

“We also welcome the additional examples of engagement escalation tactics, and the recommendation to consider public policy advocacy. However, we suggest clarifying some of the additions, notably on voting and reporting,” they wrote.

For example, NBIM recommends clarifying or replacing the word ‘infrastructure’ (paragraph 1.4 – resources) as it thinks it is currently unclear whether it refers to governance or resources, or a combination of both.

Furthermore, on reporting (paragraph 1.6) NBIM cautions on the use of the terms ‘demonstrable’ and ‘verifiable’ when describing disclosures on stewardship objectives and outcomes.

“Demonstrating the additionality of individual investors’ stewardship and the link between specific outcomes and investor engagement is a complex endeavour. Furthermore, whilst we underline the importance of accounting for engagement results, we suggest clarifying that case studies are only one of many tools to do so, as they can be detrimental to the confidential nature and effectiveness of company engagements,” they wrote.

Furthermore, regarding Principle 3 (company monitoring and engagement), NBIM is not convinced that investors should publicly disclose who is responsible for leading company engagements and believes that the added value of disclosing the seniority level and/or role of engagement leads is limited.

“Additionally, we suggest clarifying that investors should disclose to the company, not to the market, which company representatives they expect to meet and why, as the current wording might be confusing. This clarity from investors on the intended targets and goals of company engagements is a key element of high-quality stewardship.”

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