Below are key takeaways from ISS’ recently released Climate & Voting – 2020 Review and Global Trends report. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Nine markets featured climate related shareholder proposals in 2020 (Australia, Canada, France, Japan, Norway, South Africa, Spain, United Kingdom, and the U.S.).
- The majority of environmental and social-related shareholder proposals around the world in 2020 were related to climate change and/or climate lobbying. Climate-related proposals were seen related to the banking sector, the oil & gas sector, and the mining sector.
- Over the past five years, proposals requesting companies undertake climate risk analyses have been trending down over time as requests for climate transition plans have been trending up, reflecting the desire by many shareholders and other stakeholders to move beyond disclosure to see changes in a company’s strategy in response to the climate change threat.
- Requests for climate-related political spending disclosures have been a growing portion of shareholder proposals as some proponents begin to focus on disconnects between the messages on action on climate change put out by some individual companies and those messages put out by affiliated industry organizations.
- Requests for disclosure of emissions reductions goals remained the most prolific type of climate related shareholder proposal in 2020.
- Investor expectations and regulatory requirements around ESG disclosures, and climate in particular, are expected to continue to grow. One way that is expected to be manifested in 2021 is through a growing number of “Say on Climate” proposals that ask companies to regularly present a climate plan to shareholders to vote on.
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By Kathy Belyeu, Marina Fellman, Enver Fitch, Jonathan Haymon, Vasili Kolesnikoff, and Catherine Salmon.