British billionaire and activist investor Sir Chris Hohn said The Children’s Investment Fund Management (TCI) has filed climate resolutions at seven portfolio companies, including rating agencies Moody’s and S&P Global, and Google’s parent company Alphabet.
Speaking on a webinar for investors, where he gave details of the newly-launched Say on Climate campaign, Hohn said he expects that Moody’s and S&P Global will support the resolutions.
“I’ve had discussions with the CEO and CFO of Moody’s, almost every Friday for the last three weeks; there are clear expectations that they will support the resolution and embrace it, and say that this is a good thing,” Hohn said.
He added: “We believe that S&P Global will also support it because they all incorporate climate considerations into their ratings and they firmly believe this is relevant for a company’s rating and the cost of capital.”
The other companies are North America's railroad franchise Union Pacific; US telecoms and media firm Charter Communications; and neighboring rail operators Canadian Pacific and Canadian National.
Say on Climate builds on the successful climate engagement work with airport infrastructure firm Aena last month, which will be tested globally at a major scale. See RI coverage here.
Hohn explained that the concept of the campaign is “simple”, with “three parts”: emissions disclosure, planning and management to decarbonise and, most uniquely, an AGM vote on such a plan. “This legally needs to be a non-binding request for information, so the shareholder will not be taking the position of the board,” he said.
The Say on Climate campaign proposes a template of climate resolution which has been “carefully drafted” to avoid rejection from the securities regulators and that can be adapted with slight variations to different jurisdictions.
Hohn said they ask companies for reporting tht is not “exact” but “widely consistent” with the recommendations of the Task Force on Climate-related Financial Disclosures. “Then we ask for the strategy to be disclosed. We word it in a very friendly way, otherwise the SEC may reject it. So we say, if you have a strategy, show it to us.”
TCI is also compelling asset owners to incorporate the Say on Climate concept into investment policies and demand their asset managers file and vote for AGM resolutions.
Hohn said: “There will be fights, like we had at Aena, but we can win the votes. It is very hard to resist supporting it, because of the simplicity of the concept.”
The campaign, however, also envisages that companies should voluntarily propose these resolutions after this first stage in which shareholders and NGOs lead the way by filing them.
Sonia Medina, Executive Director for Climate Change at the Children’s Investment Fund Foundation (CIFF), said there are promising talks with companies “in the UK, the US and Europe, to adopt this AGM climate vote voluntarily over the next four months”.
CIFF, the philanthropic organisation co-founded by Hohn with $6bn in assets, is a supporting partner of the Say on Climate campaign together with CDP and ShareAction.
Medina added: “We are building up a much bigger wave for 2022 AGMs in the S&P 500, with hundreds of major companies globally, and we will file these resolutions on their ballots.”