The year 2022 has been marked by continued rise in greenhouse gas emissions, increasing climate change impacts, and record profits particularly in the financial and energy sectors. In this context of climate crisis, it is imperative that investors seize the opportunity of the 2023 proxy season to take action and scale up their engagement initiatives with the most carbon-emitting companies. In order to guide investors in integrating climate into their votes at 2023 AGMS, Reclaim Finance publishes a briefing which highlights the key climate-related resolutions to support, indicates how to vote on Say on Climate resolutions supported by management, and explains how to use routine resolutions to condemn the lack of ambition or disclosure of executives and board members on climate issues.\u00a0\u00a0<\/strong><\/p>\n<\/div> A <\/span>Say on Climate<\/span><\/i> resolution is proposed by a company’s management to the agenda of an AGM to obtain shareholders’ opinion on the climate strategy. In theory, this is a good governance and accountability practice. In practice, <\/span>Say on Climate<\/span><\/i> resolutions generally fail to achieve their initial purpose. Past <\/span>Say on Climate<\/span><\/i> resolutions have shown that published climate strategies were generally incomplete and did not allow investors to assess their alignment with a trajectory aiming to limit global warming to 1.5\u00b0C, with low or no overshoot and a limited volume of negative greenhouse gas emissions. The lack of information often indicates a lack of climate ambition.<\/span>\u00a0<\/span><\/p>\n Yet, many of the past <\/span>Say on Climate<\/span><\/i> resolutions have been approved by the majority of shareholders. For instance, 89% of TotalEnergies’ shareholders voted in favour of its <\/span>Say on Climate<\/span><\/i> in 2022, while the major is still developing new oil and gas fields and intends to increase its fossil fuel production in the coming years, in contradiction with the projection of the International Energy Agency\u2019s and other robust 1.5\u00b0C scenarii.\u00a0<\/span>\u00a0<\/span><\/p>\n Investors that vote in favour of climate plans that are incomplete or misaligned with a 1.5\u00b0C scenario might give the appearance of climate action, but in fact send the opposite message to the companies by enabling them to pursue a strategy which contributes to an unsustainable level of GHG emissions.<\/span>\u00a0<\/span><\/p>\n To avoid the risk of greenwashing and ensure the completeness of <\/span>Say on Climate<\/span><\/i> resolutions, investors must vote against <\/span>Say on Climate<\/span><\/i> resolutions that lack of transparency and strategies that are not aligned with a 1.5\u00b0C scenario. For example, Reclaim Finance calls on investors to oppose this year\u2019s <\/span>Say on Climate<\/span><\/i> at TotalEnergies\u2019 AGM.<\/span>\u00a0<\/span><\/p>\n<\/div> Some climate-conscious investors are filing resolutions at AGMs with the aim of expressing their expectations on climate-related issues and influencing the company’s climate strategy. Dozens of climate-related shareholder resolutions were submitted to companies, mainly in North America and Europe, ahead of the 2023 AGM season.\u00a0<\/span>\u00a0<\/span><\/p>\n Some encourage companies to be more transparent about their climate strategy. This is the case of the resolution filed by 15 investors to encourage ENGIE to submit its strategy to a vote every three years and its implementation to a vote every year and to <\/span>publish a comprehensive climate strategy, with the integration of key climate-related information. Reclaim Finance calls on investors to support these efforts considering that analysis of ENGIE\u2019s climate plan shows that it remains very incomplete and does not provide enough evidence regarding ENGIE\u2019s capacity to meet its climate goals [1]. <\/span>\u00a0<\/span><\/p>\n Other resolutions might address various elements of the strategy, such as alignment with the Paris Agreement or a 1.5\u00b0C trajectory, adoption and publication of greenhouse gas emission reduction targets, or investment plans related to the decarbonization strategy.<\/span>\u00a0<\/span><\/p>\n For instance, resolutions were filed at energy majors TotalEnergies, BP, Shell, Chevron and ExxonMobil requesting alignment of greenhouse gas emission reduction targets (including Scope 3) with the Paris Agreement by 2030. Reclaim Finance urges investors to support these resolutions because none of these companies are aligned with a 1.5\u00b0C trajectory. Analysis by Reclaim Finance shows that none of them has committed to stop oil and gas expansion despite the IEA\u2019s projections in its Net Zero Emissions by 2050 Scenario and IPPC and UN recommendations, and their 2030 oil and gas production targets are much higher than required in the IEA\u2019s Net Zero Emissions by 2050 Scenario [2].<\/span>\u00a0<\/span><\/p>\n Investors must support the above-mentioned resolutions, as well as any resolution that help improve transparency and alignment of climate strategies with a 1.5\u00b0C trajectory.<\/span>\u00a0<\/span><\/p>\n<\/div> The climate crisis requires companies to make fighting against climate change a strategic priority. <\/span>It <\/span>is therefore crucial that investors take advantage of non-climate-specific routine resolutions to ensure that climate change and decarbonization are at the heart of companies\u2019 concerns.<\/span>\u00a0<\/span><\/p>\n Investors can integrate climate issues into several routine resolutions:<\/span>\u00a0<\/span><\/p>\n At a time of climate emergency and record profits in the fossil fuel industry, Reclaim Finance urges investors to take action and responsibility at 2023 Annual General Meetings. Investors\u2019 votes should demonstrate clear opposition to climate strategies that cannot be assessed against a 1.5\u00b0C trajectory or that are inconsistent with such a scenario, in addition to supporting climate-relation resolutions and making climate the backbone of routine votes.<\/span><\/b>\u00a0<\/span><\/p>\n<\/div>Sanction inadequate climate strategies by opposing Say on Climate<\/h2><\/span>
Support climate-related shareholder resolutions that promote climate action and transparency<\/h2><\/span>
Integrate climate into routine resolutions<\/h2><\/span>
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