There is still a way to go to convince investors to vote in favor of climate resolutions at shareholder meetings. And this, even when they are committed to the climate. In Canada, there are still two “committed” shareholders out of five who have nevertheless blocked a majority of resolutions with an environmental content in the last year, according to a new study.
“Shareholder engagement is the number one tool available to investors to mitigate the risks linked to the climate transition within their portfolios. If they are not capable of supporting climate resolutions, we can wonder what the meaning of their commitment is,” raises Renaud Gignac, senior advisor to the Investors for Paris Compliance group.
Do you support Metro “adopting greenhouse gas emissions reduction targets”? That General Electric adopt a “report on financial risks linked to climate change”? Or that Enbridge “discloses absolute Scope 3 emissions”?
Here are some of the 26 climate-related shareholder proposals that Investors for Paris Compliance analyzes in a new report published Thursday. We dissect the votes of Canadian investors publicly committed to the climate in order to monitor whether they are putting their words into action.
“Our analysis reveals that 43% of investors voted against the majority of climate resolutions, while only 14% of investors voted in favor of all climate resolutions,” reports Mr. Gignac.
Progress observed
“There is still progress,” notes the analyst, who specifies that “the rate of support for climate resolutions has generally increased.”
He particularly highlights “the progress” made by certain asset managers, such as the Caisse de dépôt et placement du Québec or Desjardins. Between 2022 and 2023, their rate of support for climate resolutions increased from 33% to 89% and from 28% to 58%, respectively.
The report also illustrates that not all investors vote in the same way. “Pension fund managers tended to vote more in favor of climate resolutions than private asset managers. This is explained by the fact that pension fund managers have a longer-term vision of their investments,” we mention.
The degree of support also varies depending on the nature of the proposals, notes Mr. Gignac. Reports on climate lobbying alignment are more likely to garner support than resolutions for phasing out fossil fuels, he observes.
For this last category of resolutions, the support rate is limited to 28%. “It is very timid, even though it is necessary to vote in favor of these resolutions to achieve our climate objectives,” argues Mr. Gignac.