Buzzi Unicem | 2016

For the second time, Etica Sgr attended Buzzi Unicem’s shareholders’ meeting, held in Casale Monferrato on May 6th, 2016. Buzzi Unicem is an Italian company that specializes in the production of cement, ready-mixed concrete and aggregates.

In its address to the meeting, Etica Sgr expressed its appreciation of Buzzi’s efforts to honor Etica Sgr’s request from the previous year and publish its 2015 Sustainability Report before the date of the shareholders’ meeting, allowing shareholders to make more detailed observations. Etica Sgr also asked the company to consider establishing a specific committee to oversee the management of sustainability issues and stakeholder relations, in accordance with the latest version of Borsa Italiana’s Corporate Governance Code.

Buzzi’s business operations have a strong impact on the local community. With that in mind, Etica Sgr asked for information on the ways Buzzi was fostering dialogue with local institutions or associations on environmental issues that affect the company’s business, as well as information on the results of these stakeholder engagement initiatives. Again on this subject, Etica Sgr asked for greater disclosure in the company’s Sustainability Report or in other relevant corporate publications, especially regarding the most problematic cases.

Etica Sgr highlighted Buzzi Unicem’s participation in the CDP’s climate change initiative as a positive example of environmental commitment. It also called attention to issues concerning decarbonization, such as the importance of greater diversification in the procurement of commodities – specifically, less use of coal or oil – as well as ways to manage emissions.

As far as the agenda was concerned, Etica Sgr abstained from voting on the approval of the distribution of reserves to make dividend payments for 2015. Indeed, Etica Sgr was of the opinion that the part of distributable profits paid out in dividends should actually have been retained by Buzzi Unicem, not only to bolster its current economic situation but also to strengthen its future investments (which are beneficial to its business). Another reason in support of Etica Sgr’s stance is the fact that this is the fourth year that Buzzi Unicem has paid out dividends from its reserves despite the parent company’s negative net income.

On the subject of remuneration, Etica Sgr was pleased with the fact that Buzzi Unicem had made improvements to its Remuneration Policy based on the suggestions proposed the previous year. One of the main improvements was greater disclosure of the performance metric linked to variable pay, as well as the indication of minimum and maximum bonuses related to said metric. Another noteworthy improvement was the introduction of environmental, social, and corporate social responsibility criteria by which to base the remuneration of top management.

Nonetheless, certain international best practices are still missing: specifically, there has been no peer group analysis, and there is no Remuneration Committee. For these reasons, Etica Sgr abstained from voting.

Engagement Engagement Italian companies
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