After remuneration, climate change is the top target for shareholders' vote

This article by Il Sole 24 Ore reviews the increase in climate-related shareholder proposals witnessed in Europe in 2022. Say on Climate was one of the most relevant topics of the 2022 AGM season, according to the data from the recent Morrow Sodali 2022 European Proxy Season Review.

Say on Climate is a global initiative encouraging listed companies to periodically give their shareholders the right to vote on their climate action plans in the form of a voluntary (board-endorsed), non-binding, advisory proposal. The phenomenon has so far generated significant interest and a large number of issuers submitted their climate plans for the first time.

In 2022, 36 management proposals were submitted to the shareholder vote in the European markets under review, versus 19 resolutions in 2021. France and the UK led the ranking of countries with the most supported Say on Climate resolutions. While Italy lags behind, with only Atlantia that approved its climate proposal at its AGM in 2022 and committed to targets for greenhouse gas emissions (scope 1 and 2) before 2040, as well as the transition to electricity from 100% renewable sources.

Say on Climate resolutions in Europe are not particularly tied up to specific sectors but many companies, especially in the energy industry, are considering submitting their first resolutions on the climate issues during the 2023 shareholders' meetings.

"Say on Climate can represent a significant incentive in achieving ambitious targets linked to the reduction of emissions, but it also has the advantage of preventing activism by specialized investors,” explains Fabio Bianconi, Managing Director at Morrow Sodali.

“Mitigation of the climate risk in the short-and long-term remains a priority for investors,” adds Bianconi. According to investors, climate strategies should present comprehensive targets as well as an agenda with short, medium- and long-term objectives.

All in all, the scenario seems marked by the transition to net zero and will probably continue to impact the 2023 proxy season.

Read the full article here (in Italian).