Investors’ Shareholder Proposals, Voting Policies Toughen Climate Stance

Portfolio companies asked by investors to adopt science-based emissions targets and disclose climate-related financial risks.

Global investors are intensifying their scrutiny of corporate climate action for the 2021 AGM season, and will be filing shareholder resolutions that focus on emissions target setting, climate change and transitioning to a net-zero emissions future.

Earlier this week, Climate Action 100+ investors said they have so far filed 37 shareholder proposals at North American companies, such as ExxonMobil, Phillip66 and Berkshire Hathaway.

Investors outlined five key proposals, including asking for disclosures on climate-related risks, a better alignment within business plans to the Paris Agreement and more transparency around corporate lobbying practices that may influence energy or climate regulations.

Climate Action 100+ said these flagged proposals “are only a subset of climate-related shareholder proposals coming up for votes”.

Elsewhere, RPMI Railpen, which manages £31 billion in assets, published its voting policy for the 2021-22 AGM season, which also updates its focus on corporate governance and sustainability themes.

Railpen noted it will be outlining its expectations from portfolio companies on climate reporting, adding that companies should “appropriately incorporate material information about climate-related issues into their financial statements – and not just in their narrative reporting”. Failure to do will result in Railpen voting against the report and accounts, the audit committee chair or the auditor’s reappointment.

Railpen also outlined its intention to hold portfolio companies accountable if it deems a workforce has been mistreated throughout the Covid-19 pandemic.

Asset manager Amundi today presented the results of its 2020 voting and engagement policy, revealing it voted for 86% of resolutions calling for a better integration of climate objectives. The asset manager noted that energy transition and climate-related disclosures will continue to be a priority in 2021.

“In addition to the necessary measurement of the carbon dioxide emissions trajectories of the companies in which we invest, Amundi will support resolutions calling for greater transparency on emissions reduction strategies, combined with specific targets,” Amundi said, adding that portfolio companies should look to align emissions targets with science-based targets outlined by the SBTi.

“The 2021 proxy season is vitally important to investors who are looking for companies to respond positively to the goals of Climate Action 100+. Corporate governance of climate change is critical as board accountability holds the key to the net-zero transition,” said Anne Simpson, Managing Investment Director for Board Governance and Sustainability at California Public Employees Retirement System (CALPERS), and member of Climate Action 100+.

“We are not looking for a change of heart, but a change of strategy,” she added.

Climate Action 100+’s first Net Zero Company Benchmark will be released next month, which will assess and rank companies according to their publicly disclosed information on net-zero emissions targets and progress.

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