Financial institutions must immediately cease all new financial services and support to companies that are unable or unwilling to transform their activities to align them with a 1.5\u00b0C trajectory. However, companies not meeting the exclusion criteria or remaining in the portfolio should not be overlooked. If these companies want to engage the transformation necessary to align themselves with a 1.5\u00baC trajectory, they have no time to lose.<\/p>\n
Financial institutions must incentivise this transformation through robust engagement policies founded on specific and time-bounded demands to deploy long-term 1.5\u00baC alignment strategies and immediate emission reduction measures to halve emissions by 2030.<\/b><\/p>\n
For investors, dialogue alone is not enough to encourage a company to change: shareholders must also use their voting rights to oppose inadequate climate strategies. A robust climate voting strategy should apply not only to dedicated climate resolutions but also to strategic, management-proposed resolutions. Opposition votes must be justified by published, climate-related rationales in order to send a strong signal to companies.<\/p>\n
Reclaim Finance believes that shareholders, but also bondholders, banks, and insurers can influence corporate behaviour. We call on financial institutions to adopt the following measures.<\/b><\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>
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\nPublish and share widely the financial institution\u2019s demands to all client and\/or portfolio companies (hereinafter referred to as \u201ccompanies\u201d), along with the sanctions that may be imposed if a company fails to comply with such demands.\n<\/li>\n Develop and implement an escalation strategy that includes timebound actions of increasing intensity, applicable as long as the company shows no significant progress in addressing demands. This escalation strategy will mobilize all the tools available to financial institutions.<\/li>\n<\/ul>\n\nFor investors, these tools include: written or oral questions at annual general meetings, open letters, opinion pieces and public statements, filing shareholder resolutions, voting against management-proposed resolutions (director reelections, remuneration, etc), suspension of new investments, reduction of exposure, and total divestment.\n\nIntegrate engagement demands into the overall customer relationship and renew services dependent on the compliance with these demands.<\/li>\n Reach out to and convince other financial institutions to join the engagement efforts as part of an ambitious collaborative approach.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div><\/div><\/div>
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<\/span>The right demands<\/div><\/h1>
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Reclaim Finance calls on financial institutions to ask companies for:<\/p>\n
\nPledging to achieve net zero emissions by 2050 by aligning their activities with the 1.5\u00b0C target, with no or low overshoot and limited negative emissions, and for fossil fuel companies to move out of oil and gas by 2040 in EU\/OECD countries and by 2050 in other countries, and for the coal sector to move out ten years earlier.<\/li>\n<\/ul>\n