Shareholders have ramped up pressure on companies to tackle global warming even as businesses grapple with the fallout of the coronavirus pandemic.
Climate change resolutions at annual meetings received average shareholder support of 23 per cent up to May 20 this year, compared with 16 per cent during all of 2019, according to data compiled for FTfm by Proxy Insight, the research group.
The support comes just weeks after eight big investors, including BNP Paribas Asset Management, DWS and Comgest Asset Management, warned that tackling global warming must continue to be a priority for public companies despite the pandemic.
Among those that suffered big shareholder revolts over climate change this year were US bank JPMorgan, Australian energy companies Woodside Petroleum and Santos, mining group Rio Tinto, shipping company JB Hunt Transport Services and energy group Ovintiv.
Jeanne Martin, campaign manager at ShareAction, the charity that co-ordinated a shareholder resolution on carbon emissions at Barclays, said investor support for environmental proposals this year has been remarkable. “For all its difficulties, 2020 has seen unwavering investor action at fossil fuel companies and their financiers, despite — or perhaps because of — the global pandemic,” she said.
“Coronavirus has exposed the vulnerability of oil markets and investors could see fighting for climate action as a way of building resilience for future shocks.”
Asset managers upped their focus on tackling climate change in recent years amid rising demand for environmental, social and governance investing. Sceptics, however, dismissed some of the focus on global warming as “greenwashing” and warned that big investors would backtrack on their environmental push once market conditions became difficult again.
But the data suggest big investors are continuing to demand action from companies around climate change, even as the pandemic piles pressure on businesses.
Mirza Baig, head of governance at Aviva Investors, said: “Rather than derail the climate agenda, the pandemic has bolstered investors’ commitment to tackling systemic risks.”
He added that while European oil majors had set out “bold net zero ambitions”, companies such as “Exxon and Chevron continued to stifle shareholder dialogue and absolve themselves of responsibility for the environmental impacts”.
Meryam Omi, head of sustainability and responsible investment strategy at Legal & General Investment Management, the UK’s largest asset manager, said this year’s voting season had “shown that shareholders are increasingly aware of the importance of climate action and strong governance, and that this has not lessened because of Covid-19”.
The Proxy Insight figures do not include lobbying proposals, which are often focused on how businesses and the trade groups they belong to are working behind the scenes to influence or delay action on climate change. Several lobbying resolutions have received strong support this year, including at Woodside and Santos.
The data also do not include meetings with significant climate votes that took place this week, including at Chevron, where 46 per cent of shareholders backed a motion calling for the US oil major to set out a report on petrochemical risks and 53 per cent voted in favour of a proposal calling on the company to outline its lobbying around climate change. A further 29 per cent backed a more general report on lobbying.
Ms Martin said: “While support has increased, not many [environmental] resolutions have actually passed, and those managers who fail to support these resolutions year after year need to wake up to the realities of climate change and to the competitive edge that their peers have clearly grasped.”