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UK-based charity fund manager CCLA, US-based sustainability investing firm Pax World and campaign group ShareAction are backing a new campaign highlighting investors who abstain or vote against climate change resolutions.
The drive, dubbed the Missing 60%, is led by Preventable Surprises, the NGO founded by responsible investment pioneer Raj Thamotheram that campaigns for investors to encourage companies to reduce emissions that will allow global warming to stay below 2 degrees. With former asset management CEO Howard Covington, it has developed the ‘foreceful stewardship’ initiative.
Missing 60% has been inspired by this year’s US AGM season, where climate-change focused resolutions at companies such as ExxonMobil, Chevron and utility firm Southern Company were supported by less than 40% of investors. In contrast almost all investors supported similar proposals at Shell and BP last year.
Shell and BP themselves backed the resolutions asking for disclosure on tackling climate change, whereas Exxon and Chevron did not.
The investors who abstained or voted against the resolutions at climate focused resolutions will be known in August because of mandatory reporting of voting in the US.
Speaking to Responsible Investor, Carolyn Hayman, chair of Preventable Surprises, said it was considering naming the investors who didn’t support these resolutions as part of its campaign.
She also said that the resolution at Southern Company asking for a “demanding” 2 degrees, in contrast to just disclosure on tackling climate change, was supported by 34% of investors.“This suggests that you can go straight for a 2 degrees plan and not lose support,” said Hayman.
She said they would be encouraging investors to test this at the next AGM resolution round.
Hayman also said the campaign would focus on utility companies, rather than oil and gas majors such as Exxon who have been resistant to investor pressure. “We will shift to the demand side. Exxon has been resistant to anything other than business as usual. So it may not be the best use of activists’ time. We will focus more on utilities. We’ve made the first step with Southern. We might also tackle the automotive sector.”
She continued that over the weekend she had learnt that Blackrock, one of Exxon’s largest investors, had been unable to engage with it on the topic of climate change. “It’s not open to activist pressure.
“We will work on the demand-heavy users as a signal to Exxon.”
Parallel to the Missing 60, Hayman said there would be two initiatives. The first will explore how to put across the concept of climate-related systemic risk to investors. “You can’t hedge or avoid it through stock-picking,” she said. “It’s an unavoidable risk therefore it’s a fiduciary duty to take action on climate change. Part of that should be voting for 2 degrees transition plans.”
Preventable Surprises plans to work with the London School of Economics and others.
Secondly, Preventable Surprises will host an online dialogue focused on US investors, scientists, activists and lawyers on the issue.
Preventable Surprises will also work on ways to scrutinise transition plans.
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