Mixed results from the “Say on climate” resolutions

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Say on climate

Between April and May 2021, SfC’s members Ethos FoundationMeeschaert Asset Management and Fondazione Finanza Etica engaged a total of six companies on their respective decarbonisation plans as part of the ‘Say on Climate’ initiative. The basic idea of the ‘Say on Climate’ concept is for companies to put their climate transition plans to an advisory shareholder vote. A climate transition plan typically is a document outlining the targets set, actions planned, and progress made regarding a company’s net zero ambition. There are several potential benefits of applying the tested corporate governance mechanism of shareholder votes on corporate climate strategies:

  • having the board proposing such a vote should anchor the responsibility for the climate strategy firmly at board-level
  • such a vote should facilitate the disclosure of relevant high-quality climate disclosure in the run-up to the AGM
  • such a vote should institutionalize a dialog between company and investors on climate strategy
  • if such a vote passes it should provide the board with a strong mandate to implement the climate strategy and make the required capital expenditures to adapt the business model.

Ethos convinced the food processing conglomerate Nestlé to submit its climate strategy to the vote of its shareholders at the company’s AGM, held on the 15th of April. 95.01% of shareholders voted in favour the climate plan. 
Engaged by Ethos, Holcim (cement and building materials) has committed to draft a climate transition plan and submit it to a shareholder vote in 2022.

Meeschaert AM withdrew a resolution requesting a ‘Say on Climate’ vote one month before Engie‘s annual general meeting (which was held on 25 June 2021), after the French utility accepted to disclose more details on its transition plan. 
On the 28th of May, as CA100+ lead investor, Meeschaert voted against Total’s climate strategy, emphasizing the gap between the measures announced by the oil and gas major and what it still needs to do to genuinely align with global climate objectives. Meeschaert called on Total to stop investing in new oil and gas projects. 82.78% of shareholders voted in favour of Total’s Energy Transition Plan, while 7.3% voted against and 9.9% abstained. 

The Italian oil major Eni refused to include in its AGM agenda a ‘Say on Climate’ vote, as requested by Fondazione Finanza Etica (FFE) and other investors, but encouraged comments by shareholders on its decarbonisation plan. FFE criticised the plan during the AGM, because Eni will continue to increase its oil & gas production until 2025 and the emissions’ reduction will be particularly concentrated in the period after 2030, while it would be urgent to adopt more drastic reduction measures starting from now. 
Fondazione Finanza Etica submitted a resolution requesting a ‘Say on Climate’ vote to the Annual General Meeting of Swedish fashion giant H&M at the beginning of May. 3.36% of shareholders voted in favour of the resolution or abstained. Considering that ca. 78% of H&M’s shares are held by the Persson family, this corresponds to ca. 15% of shares not held by the family. H&M’s Chairman Karl-Johan Persson stated that «the sustainability work is well integrated into all the company’s processes (…) and our shareholders know that – therefore we do not think that any vote on this is needed at the annual general meeting each year».