Last year was one of the most active and involved ever for shareholders around the globe, featuring a record number of majority-supported environmental and social proposals from Canada to Australia. With the 2021 proxy season on the horizon, the topic of climate change looks set to continue dominating the agenda for investors and companies in the months ahead – and beyond.
In recent years, investor focus has deepened to encompass Scope 3 greenhouse gas (GHG) emissions, and widened beyond the traditional corporate targets in the energy, materials, and other extractives industries. More scrutiny is being placed on the banking industry, and how lending and financing policies address controversial projects such as arctic drilling and thermal coal.
Not all of the focus on climate change is coming in the form of shareholder proposals. Companies like Moody’s and Unilever are preemptively offering investors an advisory “Say on Climate” vote covering their climate plans and strategies. And last month, acting chair Allison Lee made improved environmental, social, and governance (ESG) reporting a top priority for the U.S. Securities and Exchange Commission. The new regulatory emphasis on sustainability brings the United States in line with markets around the globe; see, for example, the widespread adoption of the Task Force on Climate-related Financial Disclosures (TCFD) framework for managing and disclosing climate-related risks. TCFD reporting is now recommended for UK companies and mandatory in New Zealand, as well as for United Nations Principles for Responsible Investment signatories.
Similarly, institutions tasked with stewardship are embracing the power of transparency and common disclosure standards. Climate Action 100+ is once again highlighting key shareholder proposals at some of the highest-emitting companies, and later this month the investor-led group will release the results of its Net-Zero Company Benchmark, which provides a framework for assessing companies’ practices and reporting based on their public disclosures. The collaborative approach appears to be spreading, with Canadian investor groups reportedly forming a similar organization to coordinate engagement with the country’s top emitters.
Investors, companies, and other stakeholders are increasingly cognizant of the materiality of ESG concerns. The growing regulatory and legal risks of failing to adequately account for climate-related issues, along with the increasing frequency of ‘100-year’ storms and fires, has highlighted the need for long-term risk oversight and immediate action.
Glass Lewis can help.
From our unique approach on ESG initiatives, to our groundbreaking thematic Climate Policy, and our industry-leading Viewpoint voting platform, Glass Lewis offers essential expertise and powerful tools for investors looking to integrate a focus on climate and sustainability into their governance and proxy voting. Stay informed on trends and best practices with our robust library of thought leadership, including in-depth subject matter guides, white papers, and webinars, covering key emerging topics like Scope 3 emissions, E&S metrics in executive compensation, and carbon asset risk.
The Viewpoint voting platform’s powerful and accessible tools align with your workflow to improve collaboration and efficiency whether you’re casting votes or managing your engagement program. Use filters to pre-assign meetings and identify the ESG vote decisions most important to you, and streamline post-season reporting with customizable vote rationales that ensure consistency across your team. Our watch lists let you to track companies designated as systemically important GHG emitters by the Climate Action 100+ group, and receive an alert when these companies have a shareholder proposal on their meeting agenda.
And now Viewpoint users can access our innovative ESG Controversy Alerts, fully integrated into the voting platform. Receive crucial alerts that highlight potentially material concerns and reputational risks at meetings across the globe during the height of proxy season, so you don’t miss important votes. Our timely alerts are designed to provide the details you need to understand the biggest controversies at a glance, giving you time to analyze and take action through voting and engagement.
Viewpoint works directly with our suite of voting policy options, including the new TCFD-aligned thematic Policy. Taking a tiered approach, the Climate Policy allows you to target the highest-emitting companies in your portfolio and hold them accountable for effectively managing their climate-related risks. We collect policy data at the time of a company’s annual meeting, which ensures the Climate Policy is based on a company’s most recent public disclosures, unlike other vendors who use data that is one or even two years old. Basing the policy on TCFD recommendations enables you to take a globally-understood voting approach to tackling climate-related risks, in line with the industry standard for climate reporting. It’s a robust out of the box solution that allows you to vote in accordance with your responsibilities and perspective, while saving you the time and resources required to develop a policy from scratch. If you’d rather take a more hands-on approach, you can customize the policy using our extensive library of in-house data points.
Whether you utilize our thematic voting policies, our house guidelines, or a powerful custom policy tailored to your organization’s specific needs, our meeting-specific Proxy Papers give you access to comprehensive ESG research. Get voting recommendations weeks ahead of deadlines to make the optimal decision for your organization. Our approach is rooted in materiality, with a nuanced understanding of what is actually at stake, and a deep appreciation for the long-term relationship between ESG and financial performance. Unrivalled peer analysis facilitates voting and engagement, allowing you to evaluate comparisons across your portfolio on a wide range of criteria by illustrating how similar public companies are addressing the same issues. We even give companies and proponents the opportunity to respond to our research through the Report Feedback Statement (RFS), and then deliver the RFS to our subscribers with the relevant Proxy Paper.
For more information on Glass Lewis’ approach to climate change and other ESG issues, visit our ESG Solutions page or click on the button below to request more information.
