(Toronto) Canadian banks face another round of shareholder proposals focused on environmental, social and governance issues at their annual meetings this year, but little news on climate.
TD Bank sees a proposal put forward last year being proposed again this year, which calls on it to provide more details on its plans regarding the energy transition.
The six major banks are also facing a resolution tabled again pushing them to organize a consultative vote of shareholders on their objectives regarding the environment and climate change.
The only new resolution this year comes from several New York pension funds that want to push the Royal Bank of Canada to report on how its financing of low-carbon energy compares to its financing of fossil fuels.
The eight proposals contrast with the 13 tabled last year which pushed RBC, TD, BMO, Scotiabank, CIBC and National Bank to increase their action against climate change.
The change is part of a broader move away from using shareholder proposals to promote climate action, according to Morningstar’s global director of sustainability research, Hortense Bioy.
“I think momentum is slowing across the board,” she said.
“What we are seeing is an overall lower level for proposals, and particularly for climate, which started last year compared to previous years. »
This is partly explained, at least in the United States, by the strong reluctance of Republicans towards asset managers who wish to support these proposals.
This shift is also happening in part because early resolutions were more focused on pushing businesses, including banks, to start measuring and reporting their emissions and setting targets for reducing them.
Many companies, much like Canadian banks, have started to do this, so the proposals venture into trickier territory of pressing them on more specific details, such as details about transition plans or more ambitious objectives, underlined Mme Bioy.
As the climate crisis worsens, we see investors wanting to push companies even further beyond disclosing basic or minimal climate data.
Hortense Bioy, global director of sustainability research at Morningstar
Companies generally oppose and urge shareholders to reject any proposals that are too prescriptive.
Investors for Paris Compliance was careful in its wording to avoid these criticisms when it pushed TD to provide more details on its plans, argued the director of the defense group, Matt Price.
“Basically we’re just telling TD we want to see more meat on the bone. We don’t say what the meat should look like,” he explained.
The bank’s plans are too vague, with few details on how it will meet its targets or incentivize its customers to reduce their emissions, Mr. Price argued.
He cited as examples of progress what RBC has done in recent months, such as publishing its approach to client engagement on climate and setting a target to triple financing for renewable energy by 2030 to bring it to around 15 billion.
Discussions with TD were not encouraging, so the group resubmitted its proposal after obtaining 23.5% support, as well as 5.4% abstention, in the year’s vote last.
Mr. Price hopes to gain more support this year to demonstrate that investors want to learn more about the financial institution’s climate plan.
In response, TD argued that its Climate Action Plan already outlines its approach and that this plan continues to evolve as the bank engages in efforts toward carbon neutrality.
RBC, meanwhile, said in response to the resolution asking it to disclose its ratio of low-carbon financing to fossil fuels that it has published extensive climate information that it says provides transparency sufficient.