The now ending proxy season has sent a strong signal that investors expect companies to take climate change seriously.
The climate has moved to the top of shareholders’ agendas this season, both in terms of the number of shareholder resolutions and the success rate.
This year, 10 climate-related shareholder proposals received majority support, up from just three in 2020 and zero in 2019. There was an equally dramatic level of shareholder support for these proposals, with an average of 52.6 %, up from 38.5% the previous year, according to the governance and research unit of Institutional Shareholder Services, which had 24 such proposals this year, up from 10 in 2020 and 12 in 2019.
Proposals to better disclose how a company’s climate lobbying aligns with the goals of the Paris Agreement gained majority support from Exxon Mobil Corp., Phillips 66 Co., Norfolk Southern Corp., United Airlines Inc. and Delta Air Lines Inc. Similar resolutions filed with CSX Corp., Duke Energy Corp., FirstEnergy Corp., Entergy Corp., General Motors Co. and Valero Energy Corp. were pulled when companies agreed to disclose their climate lobbying activities.
A majority of Exxon Mobil shareholders also approved a proposal to disclose the climate change risks facing the company.
At Chevron Inc., 61% of shareholders supported a proposal calling for Scope 3 emission reduction targets, while 48% voted to recommend that the company report on its climate-related financial risks.
While oil and gas companies have most often been in the spotlight to address climate risks and how they will approach the energy transition, other industries, including airlines and railways, do not ‘were not spared. Even Walmart Inc. got the message, through a resolution tabled by Rhode Island Treasurer Seth Magaziner asking how it will cut back on refrigerants that contribute to climate change. While the first climate-related refrigerant resolution won just 5.5% of the vote, it creaks the threshold for it to be considered next year.
“It’s been a big year for the climate,” said Liz Gordon, executive director of corporate governance for the $ 254.8 billion New York State Pension Pool, in Albany.
“This proxy season has seen a lot of movement. I think we are seeing a real recognition by investors of the risk and the opportunities. We are also seeing a growing response from companies who also see the risk of not responding to ‘the concerns of investors, Ms. Gordon said.
Just ask the directors of Exxon Mobil Corp. Frustration over the company’s inaction in the face of climate risks and energy transitions drove the New York State Common, the California Public Employees’ Retirement System, Sacramento to $ 469.8 billion, and the California The $ 299.8 billion State Teachers’ Retirement System, West Sacramento, to support hedge fund firm Engine No. 1 won the bid to replace two of them with independent directors experienced in energy transitions and clear energies.