Guide for proxy advisors

Guide for proxy advisers

Update your voting guidelines to endorse the concept and develop criteria for assessing plans

Proxy advisers play a key role in guiding investors’ voting decisions. While every recommendation is made on a case-by-case basis, major proxy advisers recognise the materiality of climate risks and will often support reasonable shareholder proposals.

Key actions proxy advisers should take:

1 Publicly endorse this concept to help give asset managers the confidence to file shareholder proposals asking for credible climate transition action plans and provide reassurance that they are reasonable and in shareholders’ interest.
2 Update proxy advice guidelines: make clear that you will be inclined to support resolutions that increase accountability on climate. TCFD-aligned disclosure is essential but should be accompanied by a credible action plan (see here)
3 Recommend voting for ‘Say on Climate’ shareholder proposals: your recommendations are influential and can help to ensure positive votes
4 Work in partnership with existing initiatives to develop criteria for assessing the quality of a company’s climate transition action plan Key existing frameworks include: the Assessing low-Carbon Transition (ACT) initiative, CDP company scoring, Climate Action 100+ benchmark, Science-Based Targets and the Transition Pathways Initiative

Why should proxy advisers act?

  • Every company in every sector must get to net zero emissions, so a strong accountability mechanism is in the shareholder interest
  • ‘Say On Climate’ resolutions are reasonable and not overly burdensome on companies
  • Proxy advisers are influential and have a responsibility to provide their clients with advice supporting best practice