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2025: Our active stewardship illustrated

Published on
9 April 2026
Read time
1 minute(s) read

As long-term investors, Carmignac actively engage with investee companies to drive continuous improvement in how they integrate environmental, social and governance (ESG) considerations into their practices, thereby supporting sustainable value creation.

Find out how our active approach to stewardship was borne out in 2025.

111
Engagements held with investee companies
96%
of meetings voted in 2025
52%
of meetings where Carmignac voted against management at least once*

*This data refers to the number of meetings where Carmignac took a vote position against the recommendation of the board. In practice, this refers to votes cast against management-led resolutions and, in most cases, votes cast for shareholder-led resolutions (unless the shareholder-led resolution is supported by management).

Carmignac’s engagement with investee companies can be broken down into the following five areas: ESG ratings, thematic engagement, impact engagement, engagement on controversial behaviour, and engagement on proxy voting decisions.

In 2025, we initiated dialogue with 86 investee companies across the five types of engagement covering a full spectrum of ESG topics. Engagements may be relevant to more than one category at the same time.

The proportion of our engagements which had ESG relevance in 2025 was as follows.

Percentages have been rounded for presentation purposes; as a result, totals may not equal 100%.

We engaged with our investee companies in a variety of ways, including direct engagement and as part of a group.

Percentages have been rounded for presentation purposes; as a result, totals may not equal 100%.

In 2025, Carmignac voted against the management of our investee companies at least once at 52% of the meetings voted.

Below we outline how we specifically engaged with two of our investee companies in 2025.

Hyundai Motor

Sector: Automotive Manufacturing and Services
Region: Korea (Republic of)

Carmignac is an equity investor in the company across several funds1.

Korean equities have historically traded at a valuation discount relative to global peers, driven in part by persistent corporate governance shortcomings. Against the backdrop of improving governance standards in Asia—particularly Japan—and growing domestic political and retail investor attention, our objective was to leverage this momentum to encourage meaningful governance reforms at the company.

Our key asks were:

  • Strengthen board independence and committee effectiveness
  • Enhance the board’s skills and experience (finance, technology, business expertise)
  • Improve diversity across gender, nationality and professional background
  • Encourage alignment with broader governance trends and value creation initiatives

We conducted a multi‑year, escalating engagement using a combination of written communication, voting actions, and in‑person dialogue.

  • 2023: Initial Expectations and Voting Action
    During our engagement with the company, we clearly communicated our expectation that all board committees should be entirely independent, highlighting particular concerns over the Chief Financial Officer’s (CFO) involvement in the remuneration committee, which we believed compromised its impartiality. As a result, we informed the company that we would vote against the CFO’s re election due to this conflict of interest. Additionally, we urged the appointment of directors with appropriate business expertise—especially in finance and technology—and encouraged the company to broaden board diversity, spanning gender, nationality, and sector experience, to strengthen its governance framework.

  • 2024: Reinforcing Priorities In-Person
    We reiterated all 2023 governance expectations directly to management and the board during an in‑person engagement meeting. We emphasised the link between improved governance structures and long‑term valuation uplift.

  • 2025: Follow‑Up Meeting and Monitoring of Progress
    We met again with the company to review progress, provide feedback on changes, and highlight remaining areas for improvement. We also discussed future governance priorities, including the need to address circular ownership structures.

The company made substantial progress across several governance dimensions:

  • Board Independence: The remuneration committee is now fully independent following the removal of executive representation.
  • Board Diversity: Board gender diversity increased from 15% in 2023 to 33% in 2025.
  • Board Skills and Experience: Three new independent directors with relevant backgrounds in finance and technology were appointed at the 2025 AGM. Reduced reliance on academic profiles (fewer professors on the board) in favour of directors with practical business expertise.
  • Leadership and Cognitive Diversity: Management restructuring in 2025—including the appointment of a co‑CEO and a VP for ICT—further strengthened strategic oversight and cognitive diversity at the top.
  • Alignment with Market Reform Trends: Governance improvements reflect Korea’s “Value Up” agenda and growing investor pressure for better capital allocation and shareholder returns.

To build on this progress, we will continue to monitor the company and proactively engage with them.

Czechoslovak Group

Sector: Defence
Region: Czech Republic

Carmignac is a fixed income investor in the company across several funds2.

As part of the pre‑investment due diligence for Article 8 fixed income funds, we assessed if an investment in this private Czech defence manufacturer specialising in small, medium, and large‑calibre ammunition was permitted. Due to the fact that defence exposure within sustainable fund classifications remains a contentious area, therefore, the issuer was subjected to an enhanced level of scrutiny.

In addition to the general sensitivities associated with defence activities, several governance‑related risks were identified during the preliminary screening stage. These warranted a deeper assessment involving sector specialists and direct engagement with the company’s Chief Financial Officer (CFO).

We conducted a comprehensive due diligence process combining:

  • Internal ESG analysis and sector‑specific red‑flag review
  • Consultations with external defence sector experts
  • In June 2025, we had a dedicated engagement meeting with the CFO to obtain detailed disclosure, test governance robustness, and validate risk‑mitigation measures.

The engagement aimed to clarify governance practices and risk management frameworks that could materially impact the issuer’s eligibility for inclusion in Article 8 funds.

Key topics addressed with the CFO included:

  • Contracting processes and oversight mechanisms
  • Management of country risk exposure, including end use and re sale controls
  • Anti corruption policies and implementation
  • Nature and extent of the company’s relationship with the Czech government
  • Governance implications of family ownership
  • Supply chain management and traceability
  • The establishment of Environmental and Social targets for the company to support alignment with Article 8 expectations.

The enhanced due diligence, supported by direct engagement with the CFO, allowed us to conclude that the issuer meets the minimum governance and sustainability standards required for inclusion in Article 8 funds. The company was deemed investable and subsequently included in Article 8 fixed income portfolios.

We will continue to monitor delivery of the company’s formal Environmental and Social targets once published.

1As at 31/12/2025, Carmignac Emergents, Carmignac Portfolio Emergents, FP Carmignac Emerging Markets, Carmignac Portfolio Asia Discovery, Carmignac Portfolio Emerging Patrimoine, Carmignac Portfolio Human Xperience.
2As at 31/12/2025, Carmignac Portfolio Flexible Bond, Carmignac Portfolio Patrimoine, Carmignac Portfolio Credit, Carmignac Patrimoine, Carmignac Credit 2029.

To find out more on our responsible investment philosophy, please visit our Sustainable Investment section:

Sustainable Investment
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