“Stormy Weather Ahead Warning”: Climate Change Resolutions / and Investors’ Voting — “Hurricane” Coming in 2017 Shareholder Proxy Voting Season?
Guest Commentary – by Seth Duppstadt – Proxy Insight Limited
The United Nations‘ consensus reached in the “Paris Agreement” (COP 21), the goal to limit global temperature rise to within 2 degrees Celsius could turn shareholder support for climate change resolutions from a squall into a powerful hurricane at U.S. energy and utility companies this proxy season. says our team at Proxy Insight.
Example cited: The BlackRock Investment Stewardship Team’s new guidance on climate risk engagement made the possibility of a Category 5 storm conceivable — if companies aren’t responsive.
During the 2016 corporate proxy season, a particularly successful subset of shareholder-sponsored climate change resolutions — known as 2 Degree Scenario (“2DS”) proposals — averaged 37.73 percent shareholder support:
|ISSUER||MEETING DATE||% FOR|
|Devon Energy Corporation||8-Jun-16||36.06|
|Southern Company (The)||25-May-16||34.46|
|Exxon Mobil Corporation||25-May-16||38.14|
|Anadarko Petroleum Corporation||10-May-16||42|
|Occidental Petroleum Corporation||29-Apr-16||48.99|
|Noble Energy Inc.||26-Apr-16||25.1|
|AES Corporation (The)||21-Apr-16||42.21|
This was a notably high level of support for a first-round shareholder proposal — especially for climate change related. *
Example: The proposal at Occidental Petroleum almost gained a majority with 48.99% of votes cast in support (not including abstentions).
Proxy Insight data show Institutional Shareholder Services (ISS) recommended For votes for all nine 2DS resolutions, while proxy advisor Glass Lewis opposed one.
The shareholder resolutions ask companies to stress test their portfolios and report on financial risks that could occur in a low-carbon economy.
Up to 17 2DS resolutions are expected to move to vote at U.S. companies in 2017 proxy voting, according to Ceres. (Ten will be filed at companies not having these resolutions before). The next scheduled company voting on 2DS will be at AES Corp on April 20th. A preliminary proxy indicates Duke Energy shareholders will be voting on May 4.
*excluding non-US “Strategic Resilience for 2035” proposals (2015/16)
TOP-10 INVESTORS (AUM) MOST FREQUENTLY SUPPORTING “2DS” CLIMATE CHANGE RESOLUTIONS
|Deutsche Asset & Wealth Management||100.00%||0.00%||0.00%||0.00%||0.00%|
|Legal & General Investment Management||100.00%||0.00%||0.00%||0.00%||0.00%|
|Legg Mason Partners Fund Advisor, LLC.||100.00%||0.00%||0.00%||0.00%||0.00%|
|AXA Investment Managers||100.00%||0.00%||0.00%||0.00%||0.00%|
|APG (Stichting PF ABP)||100.00%||0.00%||0.00%||0.00%||0.00%|
|M&G Investment Management||100.00%||0.00%||0.00%||0.00%||0.00%|
|Canada Pension Plan Investment Board (CPPIB)||100.00%||0.00%||0.00%||0.00%||0.00%|
|California Public Employees’ Retirement System (CalPERS)||100.00%||0.00%||0.00%||0.00%||0.00%|
Information is available at: https://www.linkedin.com/pulse/climate-change-voting-calm-before-storm-seth-duppstadt
Proxy Insight is the leading provider of global shareholder voting analytics.
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