Erste Asset Management publishes Engagement & Voting Report 2025

Walter Hatak, Head of Responsible Investments at Erste Asset Management, is very satisfied with the achieved results: “The progress made over the past year shows that stewardship can make a significant contribution to positive change. The ESG backlash has helped to distinguish genuine long-term engagement from short-term positioning and has highlighted the need for engagement that goes beyond individual companies. By working closely with policymakers, investors, academia, and other relevant stakeholders, we aim to promote long-term sustainable outcomes for our clients.”

What is the meaning of engagement & voting?

The overarching concept is active ownership, which describes the exercise of an investor’s responsibility to actively influence the companies in which they have invested and their operations. The aim is to promote positive developments in the areas of social responsibility, environmental protection, transparency, and corporate governance through constructive dialogue and responsible action.

On the one hand, this can be achieved through engagement. Through structured formal and informal dialogue with companies, the goal is to positively influence corporate practices and framework conditions relating to environmental, social, and governance issues. This allows, for example, weaknesses in management’s handling of sustainability issues to be identified and addressed, and subsequently facilitates joint work on solutions to bring about improvements.

The second key pillar involves voting, that is, the active exercise of one’s voting rights. Since 2017, Erste AM has been exercising voting rights on behalf of all mutual equity funds and institutional mandates. This ensures that the voting rights of clients, as indirect shareholders of the companies in which they have invested, are exercised actively and responsibly. The prerequisite for exercising voting rights on behalf of companies is either a shareholding in excess of EUR 2mn or 5% of the outstanding shares in Erste AM’s portfolio. The in-house Voting Policy serves as the framework for all voting matters.

Stronger stewardship approach with new strategy for systemically based engagement

In 2025, Erste AM further developed its engagement approach and formalised systemically based engagement as an integral part of its stewardship strategy. In addition to direct dialogue with portfolio companies, Erste AM also engages with regulatory authorities, standard-setters, industry associations, government bodies, transnational organisations, civil society actors, and other relevant stakeholders. The aim is to address sustainability challenges in a more holistic manner and to strengthen the long-term resilience of the capital markets.

Progress on governance engagements

As a major institutional investor in Austria and in Central and Eastern Europe, the focus remains on local engagement. Particularly in its home markets, the Erste AM’s strong market position facilitates a constructive and effective dialogue with companies. In 2025, concrete progress was made in governance engagements. These include improvements in the independence of supervisory boards and key committees, in remuneration structures, in diversity, and in embedding sustainability within corporate governance.

Among other things, a local engagement process has led to the leadership of key supervisory board committees being structured to be more independent in the future. Also, the renewal and diversity of the supervisory board were strengthened and the remuneration policy revised, including a greater focus on long-term incentives, security and ESG targets. These developments are in line with recognised international governance standards and demonstrate the impact of continuous, structured engagement.

Biodiversity: from corporate dialogue to systemic impact

Biodiversity remained a strategic priority in 2025. Erste AM continued in its role as co-lead investor in Nature Action 100, focusing in particular on dialogue with Bayer AG. During the course of the year, Bayer confirmed that it was working on a comprehensive nature strategy, which is due to be published at a later date. The company also acknowledged that there was room for improvement in its current nature-related disclosures and plans to further develop these in future reporting cycles. Bayer AG is also working on an expanded methodology for assessing the nature-related impacts of its crop protection portfolio.

First sovereign engagement: climate policy dialogue with Canada

In 2025, Erste AM took part in a sovereign engagement for the first time and joined the PRI Canada Sovereign Engagement. The initiative focuses on national climate policy, credible transition pathways and the disclosure of climate-related risks at government level.

Over the course of the year, we assumed a significantly expanded role within the programme. As co-lead investor at federal level, Erste AM is responsible for leading the dialogue with the Canadian federal government on behalf of the participating investors and providing strategic guidance. As part of the initiative, we held structured discussions with members of the Canadian Parliament and representatives of the Department of Finance Canada.

Developing engagement skills within the investment community

In addition to its own engagement activities, Erste AM continues to build engagement expertise within the wider investment community. The Engagement Think Tank, which was launched by Erste Asset Management in 2024, grew to 36 members in 2025. The group includes large and smaller asset owners and asset managers from various regions – from Asia to the USA. The think tank provides a structured, trust-based platform for exchange, peer learning, and the further development of effective stewardship and engagement practices.

Highlights of the voting season 2025

In 2025, Erste AM exercised voting rights in respect of share capital amounting to about EUR 10.8bn. We cast votes for 606 companies at 670 annual general meetings. Based on the principles of the Sustainable Voting Guidelines, votes were cast against management proposals on 1,071 agenda items (11.6% of all votes). Key topics at AGMs included shareholder rights, remuneration policy, and corporate governance issues, such as the election and independence of supervisory board members.

Environmental and social issues were addressed, for example, through shareholder proposals, which were supported by Erste AM where specific requirements applied. The majority of proposals dealt with climate issues, although, particularly in the United States, there was also an increase in proposals relating to AI, mostly in connection with human rights, governance, or data protection. In the USA in particular, the number of “anti-ESG” proposals has continued to rise. Although these continue to receive only limited support, they are increasingly shaping the volume of proposals this season and contributing to the decline in average support for ESG proposals.

Conclusion: engagement and voting as long-term strategy

The Engagement & Voting Report 2025 shows that active ownership is an effective tool for active investors to support companies in their sustainable transformation. Progress is made where dialogue, clear expectations, and consistent voting behaviour work together.

For Erste AM, engagement remains a long-term process – with the goal of reducing risks, promoting sustainable value creation, and reporting regularly and transparently on successes and challenges.

Please note: investing in securities involves not only opportunities but also risks