Globally, investors approved the corporate climate strategies put forward, mostly by large majorities.

Companies globally are still wary of allowing shareholder votes on Say on Climate resolutions, but increasingly prefer to agree to non-binding company resolutions instead. UN PRI (UN Principles of Responsible Investment) reported in July 2022 (before the Australian AGM peak season) that of 576 ESG-focused resolutions in 2022 (2021: 499), fewer than 100 were Say on Climate.

In Australia, eight companies (AGL Energy Limited, APA Group, Origin, Rio Tinto, Santos, Sims Metal, South32 and Woodside) included climate plan-related resolutions at their AGMs, all of which passed. Votes ranged from 94.5% in favour (Origin) to 51% (Woodside); the other six all recorded less than 90%. Of six shareholder resolutions, three were withdrawn (Origin, Santos and Woodside) in favour of company resolutions and three (BHP, Whitehaven and New Hope) were withdrawn when the enabling constitutional change resolutions failed.

In general, proxy advisors do not favour constitutional changes to force companies to hold Say on Climate resolutions every year or otherwise tie management’s hands, and almost always recommend against such changes, particularly where shareholder resolutions attempt to mandate them.

Globally, during the 2022 proxy season, more investors voted against corporate climate strategies than in 2021, according to an MSCI analysis. Investors tended to vote against climate plans where the company’s emissions trajectory was misaligned with global temperature targets, as measured by the MSCI Implied Temperature Rise (ITR).1

Globally, investors approved the corporate climate strategies put forward, mostly by large majorities. However, the average votes Against trebled from 3.1% in 2021 to 9.6% in 2022, indicating increasing concern among some investors. In Australia it was even higher, with an average of almost 25% of shares voted Against in 2022; this may reflect a lower maturity of ESG disclosures by Australian companies, particularly around climate change, compared with Europe and the U.S.

Recent turmoil in energy markets following the war in Ukraine, the global energy crisis and a resulting focus on energy security in many countries may change some investors’ voting behaviour. In 2023, we will see if investor opposition to corporate climate strategies continues to increase, or whether more investors will give companies the benefit of the doubt on their climate plans while the current challenging market conditions persist.

Analysis of the limited number of votes in 2022 (43 companies) suggests many dissenting investors may have opposed corporate climate strategies they felt were not ambitious enough, rather than objecting to the vote itself. With more Say on Climate votes scheduled for 2023, it will be interesting to see whether or not this dynamic also holds.

Georgeson’s Insights
  • Say on Climate votes are increasing but not rapidly.
  • To avoid facing a shareholder climate resolution or votes against individual directors, companies need to:
    • Ensure they have a clear plan to transition to Net Zero that is adequate, credible and aligned with the Paris Agreement goal to keep global warming to 1.5°C.
    • Show awareness that their transition plan, particularly if they are a major emitter, will be challenging and take many years to implement.
    • Take investors on the journey even before the plan is complete, and explain carefully the stages, step targets, processes and costs likely to be incurred to get there.
    • Avoid vague statements about using ‘offsets’ or ‘carbon credits’, with no ambition to cut their emissions significantly and implying they can continue with business as usual. These show a lack of seriousness and will set the scene for hostile shareholder resolutions or votes against directors.
  • UN PRI recommends that investors facing shareholder Say on Climate resolutions should prioritise proven stewardship mechanisms to steer company ambition and execution (e.g. corporate engagement, filing and voting on shareholder proposals, voting on board composition) over company-led transition plan votes — clearly worried some companies are trying to win such votes with less than rigorous transition plans. This demonstrates the need for heavy-emitting companies to produce clear and credible Net Zero plans.


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1 MSCI Implied Temperature Rise is designed to show the temperature alignment of companies, portfolios and funds with global climate targets. It compares a company’s current and projected greenhouse-gas emissions across all emission scopes with its share of the remaining global carbon budget for keeping global warming well below 2°C. It converts a company’s “undershoot” or “overshoot” of its carbon budget to an implied rise in average global temperatures this century, expressed in degrees Celsius. (MSCI)