One investor expects companies to place management “Say-on-Climate” on the ballot

Although a number of investors are wary about whether say-on-climate is the appropriate vehicle to influence how companies approach climate change, in this blog, LGIM indicates that – perhaps along with Climate Action 100+ – it intends to submit shareholder proposals at companies that don’t place management say-on-climate on the ballot. Here’s an excerpt from that blog:

This year, we are laying out our criteria for supporting management-proposed climate transition plans. We want to encourage ambitious and credible plans to be put forward, and we feel it is important to be transparent about how our voting policy will be applied. In keeping with this, we will strongly discourage companies from putting half-baked plans to a vote. We expect all climate-transition plans to include the following:

– A public commitment to net zero by 2050;
– Disclosure of short-term (up to 2025), medium-term (2026-2035) and long-term (2036-2050) targets covering scope 1 and 2 emissions and material scope 3 emissions;
– Disclosure of current scope 1, 2 and material scope 3 emissions;
– Credible targets that are aligned to a 1.5°C trajectory. Gaining approval and verification by SBTI (or other external independent parties as they develop) can help demonstrate the credibility and accountability of plans.

To assess transition plans comprehensively and objectively, we will lean on proxy providers, LGIM’s own modelling, and broader internal and external expertise and data.