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

ISS sends mixed messages on Scope 3 votes while BlackRock fires warning shots at Fortum over coal

US proxy advisor ISS is recommending support for a climate proposal at Equinor (formerly Statoil) calling on the Norwegian state-backed oil giant to set and publish targets aligned with the goal of the Paris Agreement, covering Scope 1, 2 and 3 emissions.

Its backing of the resolution put forward by Dutch NGO Follow This is believed to be the first time one of the two big US proxy firms have supported such a proposal at a European oil major, and is likely to significantly buoy shareholder support.

Glass Lewis – ISS’ main competitor – is, however, opposing the proposal, describing it as “problematic” in its advice to investors and arguing that the “decision to adopt such a goal should be determined by management and the board”. 

But ISS states in its recommendation that “investors could benefit from additional information on how the company is managing its GHG emissions” in relation to the Paris climate goals and points to a “lack of details surrounding Scope 3 targets”. 

It adds that the binding resolution leaves “sufficient room” for the board to determine appropriate targets.

Equinor’s annual meeting takes place on 14 May. 

Interestingly, however, ISS is recommending a vote against the same proposal at Shell, also filed by Follow This. 

In its advice it points to the Anglo-Dutch oil giant’s recently announced “ambition” to become net-zero by 2050 (covering Scopes 1, 2 and 3) and its “strengthened Net Carbon Footprint reduction target of 65% by 2050”. 

The recent moves by Shell are described in the advice as a “significant step forward”, which “helps shareholders understand how the company is working to align itself with the Paris Climate Agreement” and, therefore, responds to issues addressed in the Follow This proposal. 

Glass Lewis is not supporting the proposal at Shell either, stating that the company “has already meaningfully responded to the issues raised in this resolution”. 

Shell’s annual meeting takes place on 19 May.

The influence of the US proxy firms on votes was clearly demonstrated in the unprecedented levels of shareholder support for similar Scope 3 climate target proposals at Australian oil & gas giants Santos and Woodside last month.

Mark van Baal, Founder of Follow This, described ISS and Glass Lewis’ support for the Paris-targets at Santos and Woodside as a “breakthrough in the fight against climate change, given their enormous influence”. 

But added: “If ISS and Glass Lewis were to be consistent, they would advise shareholders to vote for all five climate targets resolutions [Santos, Woodside, Equinor, Shell and Total], because they contain identical requests for Paris-aligned targets for all emissions.”

Blackrock missing on another record Australian climate vote, but rebukes Finnish energy giant on coal investment

Blackrock, which has increasingly sought to push its sustainability credentials, has revealed that it was not among the majority of shareholders (50.16%) to back the climate proposal at Woodside last month, which called on Australia’s largest oil & gas firm to set and disclose targets aligned with the Paris Agreement.

The investment behemoth opposed the resolution when it was put to Woodside’s rival Santos earlier in month (3 April) – see RI’s previous round-up.

As with the proposal at Santos, Blackrock raised concerns around the call for Scope 3 emissions targets at Woodside, stating that they “remain particularly complicated in the natural gas sector”. 

Both proposals were filed by the Australasian Centre for Corporate Responsibility (ACCR), which also put forward proposals on climate lobbying at Woodside and Santos – resolutions Blackrock also did not support, citing commitments made by both boards to undertake more comprehensive reviews. 

Woodside and Santos are both target companies of Climate Action 100+, the shareholder engagement initiative that Blackrock joined in January. 

In another voting bulletin, Blackrock revealed it had rebuked the board of state-owned Finnish energy giant Fortum – also a CA100+ target company – over its decision to increase its stake in German-based Uniper and, as a result,  “significantly increase” its exposure to coal. 

Blackrock describes the move as at “odds with the direction of travel in the industry and the goals of the Paris Agreement”. 

“The decision by the board to significantly increase its exposure to coal energy generation calls into question the board’s integration of climate risks into its corporate strategy”, it added. Blackrock voted against the “discharge of Board and President” but decided to vote ‘for’ the reelection of the board of directors to prevent disruption to the company. 

It also abstained from a shareholder proposal tabled by WWF Finland asking for the inclusion of the 1.5°C target in Fortum’s Articles of Association. 

ExxonMobil shareholders call for support for lobbying proposal at US oil giant

Californian pension giant CalPERS and US faith-based investor Mercy Investment Services, have, separately, filed proxy solicitations at the US Securities and Exchange Commission (SEC) calling on shareholders to support a proposal asking Exxon to increase transparency around its lobbying activities, particularly on climate change. 

CalPERS also urges shareholders to support another proposal for an independent chair at the Texas-based oil firm. 

Exxon’s annual meeting takes place on 27 May. 

Former Exxon CEO to be removed as Lead Independent Director at JP Morgan Chase, following shareholder campaign by New York City

This proxy season already seems to have seen one effective shareholder campaign after JP Morgan announced it will appoint a new Lead Independent Director to replace Lee Raymond, the former Exxon CEO and Chair.

Last month, New York City Comptroller Scott Stringer kick-started a ‘vote no’ campaign against Raymond, writing in a letter to the SEC: “Given his excessive tenure, past opposition to climate change science and policy, and personal financial interests, Lee Raymond is distinctly ill-equipped to serve in this role”.

JP Morgan does not cite the campaign as the reason for its decision. Raymond, who has served on JP Morgan’s board for 33 years and in board leadership roles for 19 years, will remain a director at JP Morgan. 

Lobbying 

32% of investors supported the lobbying proposal put to Boeing (27 April) calling for enhanced transparency around the troubled US aeroplane manufacturer’s lobbying activities, including on climate change and aviation regulation. Around 50% of shareholders also supported the proposal on introducing an independent Chair.