[Shareholders should] delegate to the board and then hold the board accountable. His outspokenness has earned critics from all sides. Still, obstacles remain. investor activists climate focus change To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. Shareholder resolutions in the US arent legally binding. This years voting season will show whetherbig investors are full of hot air, said Peter Uhlenbruch, director of financial sector standards at the advocacy group ShareAction. investor activism blunting
Increasingly, especially with the expansion ofTCFD and other standards and frameworks, solid sustainability credentials will be seen by investors and shareholders as a necessity, not just a nice-to-have. 1 scalping of Exxons board comes to mind, and proxy advisors like ISS Governance have recently introduced new guidance saying that under extraordinary circumstances, they "will consider recommending a vote against individual directors for material failures of governance, stewardship, or risk oversight, including demonstrably poor risk oversight of environmental and social issues, including climate change. A record 22% of resolutions focusing on environmental or social issues passed at US companies during the year, according to RBC Capital Markets. Environmentalists accuse him of exploiting the climate crisis for the sake of profit. For example, the IIGCCs framework launched earlier this year which saw 53 investors with a combined USD$14 trillion in assets take steps to define an industry standard in respect of net zero investing. shell climate change bribery biggest shareholders goals vote charged executives billion case carbon retail file gastech expo dutch gas industry This AGM season has seen a rapid proliferation of climate votes in various forms, with talk already of refining how activist investors can best engage. In August, members of the Institutional Investors Group on Climate Change (IIGCC), including Allianz, BNP, the Church Commissioners, JP Morgan Asset Management, Legal & General, and M&G Investments published an Investor Position Statement. BP saw activists Follow This demand the energy major adopt tougher carbon emission reduction targets as part of its transition to net zero. The vote passed with overwhelming support, suggesting the value of management engaging with activists. ", 2022 Deutsche Welle |
According to investor advocacy group Ceres, it was the first time for such a net-zero proposal to pass at any company. Kick off each morning with coffee and the Daily Brief (BYO coffee). Investors are seeking more accountability over the net zero commitments made by corporates in line with their role as stewards of capital.
steyer This can be seen also in the success Market Forces have had in working with the Friends Provident Foundation to call on Standard Chartered to match net zero by 2050 rhetoric with action and end the banks misaligned financing of fossil fuels.
Financial Institutions also continue to press companies to be greener. Convened by the IIGCC and informed by the Transition Pathway Initiative (TPI), investors representing USD$10.4 trillion have taken the reins and set out a standard for net zero transition plans in the oil and gas sectors.
"It is not a social or ideological agenda. Putting the long-term interest of all stakeholders, including customers and employees, over short- term profits will be better for business overall, he argues, a concept he calls stakeholder capitalism. This reflects the concerns many have with a divestment approach that presses companies to dispose of problematic assets rather than take them out of the equation all together. Until a clear winner emerges, it will be difficult for businesses and everyone else to know which is best and how best to invest and report in a way aligned with the Paris Agreement. activists shareholder protested cnn resists Once resolved, in principle, shareholder activists will be better able to assess what action they should be taking and the impact it is having. To a large extent, the scale of change that will be required remains underestimated by many. That coup was only possibly thanks to the backing of larger institutional investors, which included BlackRock. Membership commits them to integrating into their advice to clients ways to reduce carbon in their portfolios by 2050 if not before, within two years. The CEO of BlackRock Inc., the world's largest asset management firm, which oversees more than $10 trillion (8.9 trillion) in assets, is perhaps the most well known activist investor today. Business that have already stated on the sometimes complex path of integrating sustainability into their corporate purpose will find themselves best able to engage with shareholders when the time comes. That is despite the tiny activist hedge fund holding only 0.02% of Exxons shares. Potentially unsubstantiated claims can also draw the ire of regulators as DWS is finding out in Germany and the US, following allegations that Deutsche Banks asset management arm misleadingly claimed that more than half of its $900 billion in assets under management have been invested in accordance with ESG criteria. Pressure is also coming from an insurance angle. Some say Larry Fink is trying to save the world, and they don't mean it as a compliment.
https://www.barrons.com/articles/esg-sustainable-climate-investing-shareholder-activism-51655249538. climate bank england change business tesla barclays activists target aj bell photograph This copy is for your personal, non-commercial use only. The combination of incoming and yet-to-be revealed ESG-related legal obligations, restive shareholders holding companies increasingly to account, and physical impacts from climate change on, for example, global supply chains, will all combine to see a likely increase in climate-related impacts, litigation and disruption. I am expecting to see a big increase in proposals in 2022, Du Boff said. We use cookies to improve our service for you. This has in part been reflected in disposals from businesses looking to rebalance their holdings into something more climate-positive. Similar to Engine No. Now its the other way around, he said. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. 1, it is worth noting that the resolution was filed by shareholders representing a tiny fraction of BHPs shares (less than 0.006%), underlining the impact even very small activist shareholders can have if they can mobilise support from larger institutional investors. "A CEO shouldn't use house money to further a goal that may not create economic returns.
greener shareholders Executive pay has also been in the crosshairs. In the UK, premium listed companies have been subject to disclosures based on TCFD since January 2021. Not everyone is buying it. Globally, the International Financial Reporting Standards Foundation (IFRS) consulted earlier this year on accommodating an International Sustainability Standards Board (ISSB) to set IFRS sustainability standards. It marks an important and high-profile recognition of the risk of oil and gas assets becoming stranded and suggests a credible path through. These are some of our most ambitious editorial projects.
Taking NZICI as an example, it has brought together 12 global investment consulting firms, setting them nine actions to undertake in order to support reaching net zero. In this article, we take stock on how those pressures have played out and evolved over the 2021 AGM season, how the mood has changed, and where we are likely to go next. Although the vote failed (only a fifth voted in favour), it garnered double the votes won by the previous climate resolution in 2019, suggesting that whilst shareholders are giving boards a chance, they are keeping the spotlight on them to offer credible transition plans. Investors one by one are realizing that whats in the best interest of an oil major, for example, is not necessarily in the best interest of their entire portfolio, said Mark van Baal, founder of Dutch activist shareholder group Follow This, which is behind emissions resolutions this year at nine oil majors. "This is fundamentally not the role of a public company, and it's unfair to investors who may not agree with his politics," Charles Elson, a corporate governance expert at the University of Delaware, told Fox Business News in response to Fink's 2019 letter. threatening to pull hundreds of billions of dollars, asking the agency to toss a series of climate-related resolutions, high-profile comments about climate by BlackRock CEO Larry Fink, vote against at least half of ESG resolutions. But some large asset managers are also threatening to vote against companies board members and auditing firms if they dont demonstrate progress on climate. The number of ESG-related shareholder campaigns has been on the rise, barring a decline between 2020 and 2021, presumably due to disruptions caused by the pandemic. The Swiss Re Institute reported that global insured catastrophe losses topped USD$42 billion in the first of 2021, driven by increased bad weather events due to climate change. An extraordinary 99% of votes in support came after the miner recommended earlier in the year that shareholders vote in favour of the proposals. Businesses that fall behind will look increasingly vulnerable to both the investor engagement talked about above, as well as the shareholder campaigns of activist and more traditional shareholders.
Fink has made it clear that he sees tackling the climate crisis as above all a smart way to make money. Corporate Social Responsibility and Impact, "Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks. Put another way, the whole value chain from financial institutions, to their borrowers, to borrowers customers, needs to move to decarbonise. These can be wide ranging and might include: creating a response team made up of key board members, general counsel, external counsel, the bank and PR advisors; clearly articulating and updating the companys corporate purpose; engaging proactively with shareholders to ensure a full understanding of ESG aspects; ensuring ESG considerations are fully integrated into strategy; that actions keep pace with claims and keeping the board sighted on key strategic issues for when needed; and moving quickly to get ahead of changing expectations to limit the risk of targeting. activism proxy investors advocate change social nature different These are the core obsessions that drive our newsroomdefining topics of seismic importance to the global economy. Key to the Engines victory is that it was able to link its environmental arguments closely to Exxons bottom line, so something that should benefit people and planet was also about protecting profit. Our emails are made to shine in your inbox, with something fresh every morning, afternoon, and weekend. The resolution prohibits financing and underwriting of companies highly dependent on coal mining or coal power, as well as those planning new mines, plant or infrastructure for coal. Despite support from investors like BlackRock and Norges Bank for the vote, the Office of New York City Comptroller and CalPERS abstained from the Vinci vote. This paper examines whetherin the absence of mandated disclosure requirementsshareholder activism can elicit greater disclosure of firms exposure to climate change risks. Significant focus in placed on the need for comprehensive absolute and intensity emissions reduction targets, which cover all material emissions, as well as alignment of capital expenditure and production plans with a net zero target. It goes on to acknowledge winding-down as a legitimate strategy, as well as diversifying energy offerings or working through a companys value chain to re-shape demand. The vote failed, attracting just 14% of votes in favour. The results are expected to be released in October and are likely to be adopted rapidly as a worldwide baseline, although it is unlikely it will be ambitious enough to satisfy the EU. shareholder concerns chesapeke activists protest exxon disclose refineries investors Since at least the 1980s, activist shareholder campaigns have targeted a whole suite of issues, from a company's financial structure to how it treats its employees to who sits on its board. Those that take steps now to be on the front foot and get ahead of the changes that will be needed to address the climate emergency will be especially well placed to thrive, not just survive. An error has occurred, please try again later. Collectively these actors now cover nearly 25% of global CO2 emissions and over 50% of GDP.. It is also a reflection of the pace with which the sector moves, allowing multiple, competing initiatives to come forward. In September, a coalition of 220 financial institutions whose assets amount to more than USD$29.4 trillion sent a letter to over 1,600 companies saying only science-based targets for reducing emissions will be acceptable, and that a failure to align with the climate science threatens a safe and prosperous economy. In the same vein, Cevian Capital, Europes largest activist investor, announced in March that it intended to punish companies that fail to set environmental, social and governance (ESG) targets when deciding executive pay, although its unclear to what extent this threat has been made good. Investors in Costco are mad as hell about the company being a laggard on climate change, and theyre not going to take it anymore. shareholders newscast welcomes victory Both Chevron and Exxonhave also conceded votes requiring them to report on climate on lobbying and to reduce scope 3 emissions. And in spite of high-profile comments about climate by BlackRock CEO Larry Fink, the biggest asset managerswhich, as major shareholders in just about every big company, have the votes that matter moststill vote against at least half of ESG resolutions while voting in support of company management (pdf) on most other issues. Investors have started demanding more from firms in areas like sustainability and diversity. We're not done yet! "Fink apparently wants to be above the political fray," Moira Birss, climate and finance director at the environmental organization Amazon Watch said in a statement responding to this year's letter. In November, the US Securities and Exchange Commission made it easier for shareholders to include ESG issues on a company's proxy statement, which provides essential information ahead of the annual meeting of the shareholders. The proposal went on to win 98% of shareholders approval, in part demonstrating the value to management of being proactive in suggesting actions, rather than appearing to be reactive to activist pressures. qsuper activism Dozens of climate-related shareholder resolutions are on the tableat oil majors, banks, tech companies, and others, to be voted on over the next few months. Rio Tintos AGM in April saw proposals brought forward relating to lobbying and setting emissions reduction targets. The lack of consistency at present can hinder transparency to the extent they make comparisons across different business difficult. Asset managers should be voting as a default position in favor of shareholder proposals on climate. Adopting the Say on Climate approach, the statement calls for detailed corporate net zero transition plans to be drawn up, disclosed, and put to routine votes, as well as identifying directors responsible for net zero transition planning. the extent to which businesses protect those that might lose out from the transition to net zero. ", How Georgia State University Increased Graduation Rates. activist coal For the best Barrons.com experience, please update to a modern browser. ExxonMobil has seen three of its board members replaced with climate-competent board members. It shows that simply offering a Say on Climate vote wont always be enough to ward off shareholder concerns - although for the most part such votes have been very successful in this AGM season.
Increasingly, especially with the expansion ofTCFD and other standards and frameworks, solid sustainability credentials will be seen by investors and shareholders as a necessity, not just a nice-to-have. 1 scalping of Exxons board comes to mind, and proxy advisors like ISS Governance have recently introduced new guidance saying that under extraordinary circumstances, they "will consider recommending a vote against individual directors for material failures of governance, stewardship, or risk oversight, including demonstrably poor risk oversight of environmental and social issues, including climate change. A record 22% of resolutions focusing on environmental or social issues passed at US companies during the year, according to RBC Capital Markets. Environmentalists accuse him of exploiting the climate crisis for the sake of profit. For example, the IIGCCs framework launched earlier this year which saw 53 investors with a combined USD$14 trillion in assets take steps to define an industry standard in respect of net zero investing. shell climate change bribery biggest shareholders goals vote charged executives billion case carbon retail file gastech expo dutch gas industry This AGM season has seen a rapid proliferation of climate votes in various forms, with talk already of refining how activist investors can best engage. In August, members of the Institutional Investors Group on Climate Change (IIGCC), including Allianz, BNP, the Church Commissioners, JP Morgan Asset Management, Legal & General, and M&G Investments published an Investor Position Statement. BP saw activists Follow This demand the energy major adopt tougher carbon emission reduction targets as part of its transition to net zero. The vote passed with overwhelming support, suggesting the value of management engaging with activists. ", 2022 Deutsche Welle |
According to investor advocacy group Ceres, it was the first time for such a net-zero proposal to pass at any company. Kick off each morning with coffee and the Daily Brief (BYO coffee). Investors are seeking more accountability over the net zero commitments made by corporates in line with their role as stewards of capital.
steyer This can be seen also in the success Market Forces have had in working with the Friends Provident Foundation to call on Standard Chartered to match net zero by 2050 rhetoric with action and end the banks misaligned financing of fossil fuels.
Financial Institutions also continue to press companies to be greener. Convened by the IIGCC and informed by the Transition Pathway Initiative (TPI), investors representing USD$10.4 trillion have taken the reins and set out a standard for net zero transition plans in the oil and gas sectors. 
"It is not a social or ideological agenda. Putting the long-term interest of all stakeholders, including customers and employees, over short- term profits will be better for business overall, he argues, a concept he calls stakeholder capitalism. This reflects the concerns many have with a divestment approach that presses companies to dispose of problematic assets rather than take them out of the equation all together. Until a clear winner emerges, it will be difficult for businesses and everyone else to know which is best and how best to invest and report in a way aligned with the Paris Agreement. activists shareholder protested cnn resists Once resolved, in principle, shareholder activists will be better able to assess what action they should be taking and the impact it is having. To a large extent, the scale of change that will be required remains underestimated by many. That coup was only possibly thanks to the backing of larger institutional investors, which included BlackRock. Membership commits them to integrating into their advice to clients ways to reduce carbon in their portfolios by 2050 if not before, within two years. The CEO of BlackRock Inc., the world's largest asset management firm, which oversees more than $10 trillion (8.9 trillion) in assets, is perhaps the most well known activist investor today. Business that have already stated on the sometimes complex path of integrating sustainability into their corporate purpose will find themselves best able to engage with shareholders when the time comes. That is despite the tiny activist hedge fund holding only 0.02% of Exxons shares. Potentially unsubstantiated claims can also draw the ire of regulators as DWS is finding out in Germany and the US, following allegations that Deutsche Banks asset management arm misleadingly claimed that more than half of its $900 billion in assets under management have been invested in accordance with ESG criteria. Pressure is also coming from an insurance angle. Some say Larry Fink is trying to save the world, and they don't mean it as a compliment.
https://www.barrons.com/articles/esg-sustainable-climate-investing-shareholder-activism-51655249538. climate bank england change business tesla barclays activists target aj bell photograph This copy is for your personal, non-commercial use only. The combination of incoming and yet-to-be revealed ESG-related legal obligations, restive shareholders holding companies increasingly to account, and physical impacts from climate change on, for example, global supply chains, will all combine to see a likely increase in climate-related impacts, litigation and disruption. I am expecting to see a big increase in proposals in 2022, Du Boff said. We use cookies to improve our service for you. This has in part been reflected in disposals from businesses looking to rebalance their holdings into something more climate-positive. Similar to Engine No. Now its the other way around, he said. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. 1, it is worth noting that the resolution was filed by shareholders representing a tiny fraction of BHPs shares (less than 0.006%), underlining the impact even very small activist shareholders can have if they can mobilise support from larger institutional investors. "A CEO shouldn't use house money to further a goal that may not create economic returns. greener shareholders Executive pay has also been in the crosshairs. In the UK, premium listed companies have been subject to disclosures based on TCFD since January 2021. Not everyone is buying it. Globally, the International Financial Reporting Standards Foundation (IFRS) consulted earlier this year on accommodating an International Sustainability Standards Board (ISSB) to set IFRS sustainability standards. It marks an important and high-profile recognition of the risk of oil and gas assets becoming stranded and suggests a credible path through. These are some of our most ambitious editorial projects.
Taking NZICI as an example, it has brought together 12 global investment consulting firms, setting them nine actions to undertake in order to support reaching net zero. In this article, we take stock on how those pressures have played out and evolved over the 2021 AGM season, how the mood has changed, and where we are likely to go next. Although the vote failed (only a fifth voted in favour), it garnered double the votes won by the previous climate resolution in 2019, suggesting that whilst shareholders are giving boards a chance, they are keeping the spotlight on them to offer credible transition plans. Investors one by one are realizing that whats in the best interest of an oil major, for example, is not necessarily in the best interest of their entire portfolio, said Mark van Baal, founder of Dutch activist shareholder group Follow This, which is behind emissions resolutions this year at nine oil majors. "This is fundamentally not the role of a public company, and it's unfair to investors who may not agree with his politics," Charles Elson, a corporate governance expert at the University of Delaware, told Fox Business News in response to Fink's 2019 letter. threatening to pull hundreds of billions of dollars, asking the agency to toss a series of climate-related resolutions, high-profile comments about climate by BlackRock CEO Larry Fink, vote against at least half of ESG resolutions. But some large asset managers are also threatening to vote against companies board members and auditing firms if they dont demonstrate progress on climate. The number of ESG-related shareholder campaigns has been on the rise, barring a decline between 2020 and 2021, presumably due to disruptions caused by the pandemic. The Swiss Re Institute reported that global insured catastrophe losses topped USD$42 billion in the first of 2021, driven by increased bad weather events due to climate change. An extraordinary 99% of votes in support came after the miner recommended earlier in the year that shareholders vote in favour of the proposals. Businesses that fall behind will look increasingly vulnerable to both the investor engagement talked about above, as well as the shareholder campaigns of activist and more traditional shareholders.
Fink has made it clear that he sees tackling the climate crisis as above all a smart way to make money. Corporate Social Responsibility and Impact, "Shareholder Activism and Firms' Voluntary Disclosure of Climate Change Risks. Put another way, the whole value chain from financial institutions, to their borrowers, to borrowers customers, needs to move to decarbonise. These can be wide ranging and might include: creating a response team made up of key board members, general counsel, external counsel, the bank and PR advisors; clearly articulating and updating the companys corporate purpose; engaging proactively with shareholders to ensure a full understanding of ESG aspects; ensuring ESG considerations are fully integrated into strategy; that actions keep pace with claims and keeping the board sighted on key strategic issues for when needed; and moving quickly to get ahead of changing expectations to limit the risk of targeting. activism proxy investors advocate change social nature different These are the core obsessions that drive our newsroomdefining topics of seismic importance to the global economy. Key to the Engines victory is that it was able to link its environmental arguments closely to Exxons bottom line, so something that should benefit people and planet was also about protecting profit. Our emails are made to shine in your inbox, with something fresh every morning, afternoon, and weekend. The resolution prohibits financing and underwriting of companies highly dependent on coal mining or coal power, as well as those planning new mines, plant or infrastructure for coal. Despite support from investors like BlackRock and Norges Bank for the vote, the Office of New York City Comptroller and CalPERS abstained from the Vinci vote. This paper examines whetherin the absence of mandated disclosure requirementsshareholder activism can elicit greater disclosure of firms exposure to climate change risks. Significant focus in placed on the need for comprehensive absolute and intensity emissions reduction targets, which cover all material emissions, as well as alignment of capital expenditure and production plans with a net zero target. It goes on to acknowledge winding-down as a legitimate strategy, as well as diversifying energy offerings or working through a companys value chain to re-shape demand. The vote failed, attracting just 14% of votes in favour. The results are expected to be released in October and are likely to be adopted rapidly as a worldwide baseline, although it is unlikely it will be ambitious enough to satisfy the EU. shareholder concerns chesapeke activists protest exxon disclose refineries investors Since at least the 1980s, activist shareholder campaigns have targeted a whole suite of issues, from a company's financial structure to how it treats its employees to who sits on its board. Those that take steps now to be on the front foot and get ahead of the changes that will be needed to address the climate emergency will be especially well placed to thrive, not just survive. An error has occurred, please try again later. Collectively these actors now cover nearly 25% of global CO2 emissions and over 50% of GDP.. It is also a reflection of the pace with which the sector moves, allowing multiple, competing initiatives to come forward. In September, a coalition of 220 financial institutions whose assets amount to more than USD$29.4 trillion sent a letter to over 1,600 companies saying only science-based targets for reducing emissions will be acceptable, and that a failure to align with the climate science threatens a safe and prosperous economy. In the same vein, Cevian Capital, Europes largest activist investor, announced in March that it intended to punish companies that fail to set environmental, social and governance (ESG) targets when deciding executive pay, although its unclear to what extent this threat has been made good. Investors in Costco are mad as hell about the company being a laggard on climate change, and theyre not going to take it anymore. shareholders newscast welcomes victory Both Chevron and Exxonhave also conceded votes requiring them to report on climate on lobbying and to reduce scope 3 emissions. And in spite of high-profile comments about climate by BlackRock CEO Larry Fink, the biggest asset managerswhich, as major shareholders in just about every big company, have the votes that matter moststill vote against at least half of ESG resolutions while voting in support of company management (pdf) on most other issues. Investors have started demanding more from firms in areas like sustainability and diversity. We're not done yet! "Fink apparently wants to be above the political fray," Moira Birss, climate and finance director at the environmental organization Amazon Watch said in a statement responding to this year's letter. In November, the US Securities and Exchange Commission made it easier for shareholders to include ESG issues on a company's proxy statement, which provides essential information ahead of the annual meeting of the shareholders. The proposal went on to win 98% of shareholders approval, in part demonstrating the value to management of being proactive in suggesting actions, rather than appearing to be reactive to activist pressures. qsuper activism Dozens of climate-related shareholder resolutions are on the tableat oil majors, banks, tech companies, and others, to be voted on over the next few months. Rio Tintos AGM in April saw proposals brought forward relating to lobbying and setting emissions reduction targets. The lack of consistency at present can hinder transparency to the extent they make comparisons across different business difficult. Asset managers should be voting as a default position in favor of shareholder proposals on climate. Adopting the Say on Climate approach, the statement calls for detailed corporate net zero transition plans to be drawn up, disclosed, and put to routine votes, as well as identifying directors responsible for net zero transition planning. the extent to which businesses protect those that might lose out from the transition to net zero. ", How Georgia State University Increased Graduation Rates. activist coal For the best Barrons.com experience, please update to a modern browser. ExxonMobil has seen three of its board members replaced with climate-competent board members. It shows that simply offering a Say on Climate vote wont always be enough to ward off shareholder concerns - although for the most part such votes have been very successful in this AGM season.
