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Climate Change Resolutions

EQ Advisory: Climate Change Resolutions

Thursday, 21 March 2024

In this article, our EQ Advisory Corporate Governance team explore what climate related resolutions are and why it’s important for companies to understand the trend surrounding this.

Contributors: Scott Ormrod - Corporate Governance Manager, Anne-Marie Clarke – Director, Head of Corporate Governance

What are climate related resolutions?

Climate related resolutions can cover a range of topics, such as shareholders setting standards for a company’s reporting on their environmental impact or getting a company to adopt policies to dictate their activities. They may also come from management, seeking to gain approval for their climate related disclosures or activities.

Climate change has become a crucial topic among the different stakeholder groups, especially since COP26 in November 2021, when countries updated their commitments to achieve the Paris Agreement goals. Since then, governments, regulators, companies, asset managers, asset owners, etc. have each undertaken actions to progress on the mitigation of climate change impact supported by the launch of different projects and initiatives.

How do the Corporate Governance team in EQ Advisory support?

Here at Equiniti we have developed a new product that specifically helps issuers to understand the key climate initiatives, including Climate Action 100+, supported by their investors. This helps to focus the conversation both internally, to drive action and reporting, and externally when speaking with investors. All with the aim of driving engagement and alignment on the transition to Net Zero. Information on this product can be found here.

What is the trend in climate related resolutions and is there a difference between regions?

From our research covering six years from the start of 2018 to the end of 2023 we have found that climate related resolutions that were submitted for shareholder approval differ significantly between regions. Displayed in figure 1 we can see that in the US shareholder proposed resolutions are far more common than in other regions, whereas in the UK and Europe management are far more likely to propose climate related resolutions.

What is the trend in climate related resolutions and is there a difference between regions?
Figure 1

This may reflect the reporting requirements across the different markets. In the UK the Listing Rules require companies to report against TCFD, as well as other bodies such as the Investment Association (IA) and IFRS setting their expected standard on reporting. The requirement for such reporting in the UK may indicate a reason for the relatively low quantity of shareholder proposed resolutions when compared to the US. From the data it would appear that US shareholders feel the need to play a more proactive role in encouraging their companies to report on climate issues.

Zally Ahmadi, Senior Vice President Corporate Governance, ESG & Executive Compensation in the US comments “In light of the absence of meaningful regulatory requirements regarding climate disclosure for issuers in the US, we saw investors lead the push instead with a surge in climate-related shareholder proposals, with requests ranging from enhanced disclosure around climate initiatives to the adoption or reduction in GHG-related targets. In fact, in the year following the initial withdrawal by the US from the Paris Accords in 2020, we saw climate-related shareholder proposals in the US surge in both the number of proposals submitted and support levels recorded; it was the first year where the average support for all climate-related shareholder proposals in the US was above a majority of votes cast.”

We also found that over time climate related resolutions have become more common in the US market. This increase has mainly been driven by shareholder proposals, as shown in figure 2. This increase may represent an increased focus on climate related issues among US shareholders.

Climate Related Proposals
Figure 2

What are the support levels?

Support for Climate based resolutions differs greatly depending on the type of resolution and who has sponsored it. As shown in figure 3 the largest determining factor for predicting the level of support a climate resolution will receive is whether the resolution was proposed by management or shareholders. This difference was consistent across regions, with management proposals receiving far more support than shareholder proposals.

What are the support levels?
Figure 3

Zally Ahmadi observes “This past year we’ve seen a shift in the US market in how investors have responded to climate-related shareholder proposals – though proposals submissions increased, support levels were notably lower than previous years. Many of the requests within the proposals have become increasingly prescriptive, which has contributed to this decrease in support and potentially signals that many proponents may have moved away from what larger institutional investors are comfortable supporting.”

Looking at the UK, is there more emphasis on these types of resolutions in different sectors?

Shareholder proposals are more common in some sectors of the UK market than in others. As shown in figure 4, this is particularly evident in the Energy sector, where the majority of climate related resolutions are proposed by shareholders. Conversely, we see Management sponsored climate resolutions much more frequently in the Financials sector than in others.

Looking at the UK, is there more emphasis on these types of resolutions in different sectors?
Figure 4

In figure 5 we can see how these trends have evolved over time, with 2023 seeing a drop in climate related resolutions across all sectors where they were previously present. This is made even more interesting by the fact that 2022 had seen the highest quantity of climate related resolutions of any year until that point.

Resolutions over time
Figure 5

Why is it important to understand the trend in climate related resolutions?

Looking at the trends of climate resolutions will allow companies to better understand the interests and actions of their shareholders, thus enabling them to better prepare their activities and communication towards achieving alignment with shareholders on climate issues. Furthermore, investigating the differing trends on resolutions between regions and sectors allows companies to assess how to tailor their approach to gain alignment between management and their shareholders. This can then be applied to their strategy and activities on climate change considerations that are relevant to their position in the market, rather than attempting to adopt a generalised, ‘one size fits all’ approach.

What does the future hold in the UK?

Transparency is the name of the game when it comes to reporting on climate issues. This could be seen in the IA Shareholder Priorities 2023, which emphasized the importance of companies reporting on the methodologies used to set targets and measure progress. Companies with large environmental impacts should communicate clearly to shareholders on their progress to minimising their environmental footprint, as we can see from the collected data that sectors, such as the energy sector, are much more likely to receive climate resolution proposals from their shareholders.


From the data collected, we can see that the factors surrounding climate related resolutions vary greatly depending on region and sector. It is important to note that what may work for one company is not going to be directly applicable to a company that operates in a different area of the market. It is therefore necessary to tailor approaches to reporting and communicate with stakeholders to understand their needs.

To read more about season trends in the US, please see the “2023 The Debriefing”, which includes US environmental proposal trends in more detail.

There are many ways in which EQ support clients with advice on key ESG matters and shareholder engagement. EQ have recently released a new product, aimed at supporting the conversation between issuers and their investors on the topic of Net Zero. See our website pages here, and please reach out to us here, to find out more.

EQ works proactively with companies to achieve positive results, utilising in-depth research and shareholder engagement to secure the best voting outcomes possible from annual and special general meetings.

For further information, please see the EQ Advisory Proxy Solicitation Services website.

Proxy Solicitation Advisory

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