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AGM Season: The latest developments on global ESG-related resolutions

Investor support for Paris-aligned proposal at Equinor doubles from last year; State Treasurers back bid to oust oilman from JP Morgan

This year’s first outing of Dutch climate activist Follow This’s Paris-aligned climate proposal saw it double its support at Norwegian state-backed oil giant Equinor (formerly Statoil).

Yesterday, at the oil major’s annual meeting in Stavanger, 27% of non-governmental votes backed the resolution, up from 12% in 2019. 

The proposal was supported by US proxy advisor ISS and is believed to be the first time one of the big advisors has backed such a resolution at a European oil major. 

However, when votes of the Norwegian Government – which holds a 67% stake in the firm – are counted overall support for the proposal was just 3% – way off the simple majority needed for it to pass. 

“We fail to understand that a government that signed the Paris Climate Agreement voted against a climate resolution that requests commitment to the Paris Climate Agreement,” said Mark van Baal, Founder of Follow This.

Follow This will put the same proposal, which calls for Paris-aligned climate targets, covering Scope 1,2 and 3 emissions, to Shell next week (19 May). 

Earlier this week, London-based asset manager Sarasin & Partners revealed that it will support the Dutch NGO’s proposal at Shell and similar investor-backed one at Total, describing the European oil majors’ recent net-zero commitments as “empty promises”.

US State Treasurers throw weight behind campaign to remove oilman from JP Morgan’s Board

US State Treasurers have joined the campaign to oust Lee Raymond from the board of JP Morgan Chase over the former CEO and Chair of Exxon’s lack of independence and climate competency.

Last month, New York City Comptroller, Scott Stringer, who oversees the City’s five public pension funds, kick-started a ‘vote no’ campaign against Raymond.

JP Morgan, subsequently, revealed that it would appoint a new Lead Independent Director to replace Raymond, but the octogenarian, who has served on the US financial heavyweight’s board for 33 years, remains a director.

Stringer described the bank’s decision as “a tremendous victory for shareholders and for the planet” but reiterated the need for Raymond to step down completely, stating: “There must be no place for a climate change denier and former Exxon CEO on JPMorgan’s board.”

US NGO Majority Action told RI that the State Treasurers of Connecticut, Oregon and Rhode Island have now joined New York City and State Comptrollers and California public pension giant CalPERS in planning to vote against Raymond’s reelection at JP Morgan’s upcoming annual meeting (19 May). 

All have also announced that they will vote FOR the proposals calling for the bank to establish an independent chair and align its portfolio with the goals of the Paris Agreement – JP Morgan is currently the largest global financier of the fossil fuel sector.

Treasurers for Maine, Maryland, Massachusetts, Vermont, Wisconsin and Pennsylvania are also supporting the campaign.

Support for Barclays’ climate “ambition” eclipses proposal on phasing out fossil fuels 

Last week, close to a quarter of shareholders (24%) in Barclays supported a pioneering investor-backed proposal calling on the UK banking group to phase out financing for fossil fuels and utility companies that are not aligned with the Paris climate goals.

But Barclays’ counter proposal, pledging its “ambition” to become a net-zero bank by 2050, eclipsed the investor-backed one led by NGO Shareaction with support of 99.9%. 

Barclays’ proposal drew the support of the big US proxy advisors, Glass Lewis and ISS. Both advisors also recommended voting against Shareaction’s resolution, highlighting the technical difficulties with supporting two binding proposals on the same issue.

US investment behemoth Blackrock, one of Barclays’ top three shareholders, opted to back the management’s proposal and, echoing the proxy firms, said supporting both binding proposals would be “problematic”.

Next week (21 May) Blackrock will face a resolution on how it intends to realise the Business Roundtable Commitments (BRT) its CEO and Chair, Larry Fink put his name to in August by signing the corporate lobby group’s statement on the purpose of a corporation, which appeared to herald a shift away from shareholder-centric capitalism.

Big votes at US companies:

An impressive 42% of investors supported the proposal at Duke Energy calling on the US energy giant to ramp up disclosures of its lobbying activities. The proposal was filed by US faith investor Mercy Investment Services. Another proposal on separating the chair and CEO roles at the firm, filed by New York City, received 40% support. 

And 31% of shareholders backed a proposal filed by US SRI firm Trillium at Verizon calling on the US telecommunications giant to look into the feasibility of integrating user privacy protections into its executive compensation. 

Moving to South Africa:

Nedbank has become the first South African bank to “proactively” table its own binding shareholder proposals on climate risks and financing the low carbon transition. The move has been welcomed by the country’s civil society groups, including Just Share. Similar proposals have been filed in South Africa at Standard Bank and FirstRand but this is the first time a bank has proposed climate resolutions itself. Nedbank’s annual meeting takes place on 22 May.

And, finally, in Australia: 

Last week saw large shareholder support again in Australia for a Paris climate target proposal, this time at Rio Tinto – 37% of investors backed calls for the Anglo-Australian miner to set clear targets to cut emissions, including Scope 3. The proposal was filed by NGO Market Forces. 

It follows record breaking votes on similar proposals at Aussie oil & gas giants Woodside and Santos.