Investors Seek Greater Climate Action in 2021 Proxy Season
Science-based emissions reductions plans and Paris-aligned policy advocacy sought in shareholder resolutions
Investors’ increasing concerns about the climate crisis are reflected in 136 climate-related shareholder resolutions filed so far this year and in stepped up engagement, as investors seek to hold companies accountable for mitigating both the systemic and business-specific risks of global warming, according to a new analysis by the sustainability nonprofit Ceres.
In a year when hundreds of investors have pledged to engage with companies on the work needed to hold global temperature rise to 1.5 degrees Celsius, Ceres found engagements have led to 54 shareholder resolutions being negotiated and withdrawn before going to a vote as companies agreed to take actions sought.
A number of the agreements focus on plans to set corporate science-based targets for reducing greenhouse gas (GHG) emissions, such as those reached at Domino’s Pizza, Citigroup, JP Morgan Chase, Cleveland Cliffs, Albemarle Corp., Pentair, Realty Income Corp., and others. Other agreements ask for disclosures on how corporate climate lobbying aligns with the goals of the Paris Agreement, such as those reached following proposals withdrawn at CSX, Duke Energy, Entergy, First Energy Corp, and Valero coordinated with the Interfaith Center on Corporate Responsibility.
Ceres has been tracking and analyzing 2021 climate-related shareholder resolutions including those resulting in agreements as annual general meetings get underway.
“Hundreds of investors including dozens of the world’s largest pension funds and asset managers are working towards a net-zero emissions global economy by 2050 or sooner,” said Kirsten Spalding, senior director of the Ceres Investor Network. “To do that they’ve committed to work with portfolio companies to develop and implement rigorous plans to bring down emissions and advocate for effective Paris-aligned climate policies.”
73 asset managers with a combined $32 trillion in assets under management through the Net Zero Asset Managers initiative and 22 asset owners with a combined $1.2 trillion through the Paris Aligned Investment Initiative have committed to transition their portfolios to net zero by 2050 or sooner, including reaching interim targets by 2030. An essential part of reaching net-zero goals involves encouraging portfolio companies to decarbonize.
Shareholder resolutions headed to a vote this year include 15 that ask companies to commit to reduce greenhouse gas emissions, including some that seek alignment with the Paris Agreement goal of limiting global temperature rise to 1.5 degrees Celsius. Emissions reductions proposals headed for a vote include those at Bloomin’ Brands, Booking Holdings, Chevron Corp., McKesson Corp and United Parcel Services (UPS). Others going to a vote are resolutions at Caterpillar, GE, and Twitter that seek progress against the Net Zero indicator on the Climate Action 100+ Benchmark.
The second largest number of resolutions filed focus on lobbying disclosure, as investors recognize the systemic risk of the climate crisis and the need for government policies that meet the Paris Agreement goals. Ceres is tracking 20 lobbying proposals 12 of which ask companies to disclose how their climate lobbying aligns with Paris. They include resolutions at Delta Airlines and ExxonMobil—the oil major considered the furthest behind in climate action — filed by BNP Paribas Asset Management, and at Boeing, Citigroup, Dominion Energy, General Motors, Phillips66 and United Airlines.