Say-on-Climate: Why not vote every year?
Among the topics expected at 2023 shareholder meetings, Climate comes first. 30 companies have already voted in recent years. In 2022, 17 companies in Europe, including 12 in France, Totalénergies and Engie, and also Carrefour, Amundi, Carmila, Mercialys, EDF, Elis, Getlink, Icade, Française de l’Energie, and Nexity. Elsewhere in Europe, 5 companies were forced to address the issue, under pressure from NGOs supported by the world’s largest asset managers, Shell in the Netherlands, Equinor in Norway, H&M in Sweden, Barclays and BP in the UK.
But content of this vote remains open. Its frequency varies from one company to another, as does its purpose.
Periodicity. Overseas, at the Apple meeting on March 10th, the shareholders asked for an annual vote, against management advice. They did not succeed. The worldwide trend is not yet towards an annual vote. Engie published this week the agenda for its 2023 general meeting. Climate is not on the agenda, whereas it was in 2022. This choice has a symbolic value on the market, because Engie counts among its directors the president of the Climate working group created in 2019 by the French Institute of Directors (IFA), Françoise Malrieu. In other words, Engie’s choices in terms of climate governance have the image of best practices in the marketplace. Vinci also follows this trend. Conversely, Totalénergies is returning to its shareholders for the third year in a row.
Content. What is being put to the vote? The range is wide. Engie’s 2022 proposal, a consultative vote on climate transition strategy, was similar to Iberdrola’s in 2021. Aena in Spain, Glencore in the UK have followed the same global approach. Nestlé in Switzerland, Unilever in the UK, Shell in the Netherlands and Vinci in France went one step further, asking for a firm vote – which they won almost unanimously, except for Shell, which was slightly behind. In other cases, it is on the basis of the climate report that management solicits shareholders, as at Calida in Switzerland, Ferrovial in Spain or Totalenergies in France. Less frequently, management restricts the Climate vote to the choice of quantified objectives: the ambition in terms of decarbonisation, as at Atos in France in 2021, or the Climate reporting indicators, as at Aviva in the UK. This is a risky choice, because it puts us on the activists’ ground. When they impose a shareholder debate, it is on these very targeted themes.
However, when it comes to Climate, all what asset managers ask is to debate on the subject. Climate resolutions get 92% approval on average, so much for a plebiscite. For this reason alone, it is worth putting Climate on the agenda.