Say on Climate is an initiative to give shareholders a vote on companies’ climate transition action plans. It was started as an opportunity for investors to express approval or disapproval of company’s climate plans, supported by the Children’s Investment Fund Foundation (CIFF)[i]. Company plans were first voted on under the Say on Climate initiative in 2021.
Many large companies, such as Unilever, Glencore, and Shell, have adopted Say on Climate resolutions at their AGMs. Some asset managers, for example Legal & General Investment Management and Ninety One, have publicly declared support for the initiative.
Our list of resolutions included 36 Say on Climate resolutions. Six of these were filed by shareholders, requesting the company to adopt an annual advisory vote on the company’s climate plan. Thirty were management-sponsored standing votes requesting shareholders to approve the company’s climate plan.
We did not include Say on Climate resolutions when scoring and ranking asset managers. This is because votes for and against management-backed climate plans are difficult to interpret. Also, we have not assessed the credibility of individual plans, with standards for assessing climate plans currently under development[ii].
It is crucial that investors evaluate each climate transition plan strictly on its compliance with the Paris Agreement, given the urgent need to decarbonise the global economy. While investors may wish to acknowledge the effort a company has put into developing a plan and bringing it to shareholders for approval, investors should be wary of backing plans unless there is clear evidence that they are Paris-aligned, credible and methodologically robust. Asset managers should continue to vote in favour of shareholder proposals that push companies towards Paris-alignment.
Management-sponsored Say on Climate resolutions
In 2021, management-sponsored votes received 97% support on average. In 2022, the average support for management-sponsored votes analysed was 89%, perhaps reflecting that investors are being more critical of investee companies’ climate plans than in the past.
All 30 of the management-sponsored votes received majority support (Figure 15), although there was significant investor opposition to plans at energy companies Woodside Energy and Santos, where the climate policies received 51% and 63% support respectively. As well, some of the first Say on Climate resolutions at European banks gained relatively low support of around 80%.
Proxy voting advisors ISS and Glass Lewis recommended investors back over half of the Say on Climate resolutions analysed. Glass Lewis recommended investors abstain on six of the votes, as a way of signalling that “disclosure concerning the governance of the Say on Climate vote is not present”.
Shareholder-sponsored Say on Climate resolutions
None of the six shareholder resolutions on our list received majority support, averaging 22% support. All were filed at Canadian banks by shareholder advocacy group Mouvement d’Éducation et de Défense des Actionnaires (MÉDAC). MÉDAC targeted Canadian banks that continue to finance fossil fuel companies.
Glass Lewis recommended voting against all six of the shareholder resolutions. Glass Lewis’ reasoning reflects the nuances of these votes. They suggest that giving shareholders a vote on climate plans risks letting the board off responsibility for the climate transition. Potentially, they argue, management can avoid accusations of greenwashing by stating that the plan has been approved by shareholders.
Case study: Barclays
Ask: Approve Barclays' Climate Strategy, Targets and Progress 2022
Resolution number: 26
AGM date: 4 May 2022
Result: 80.8% For / 19.2% Against
Barclays’ Say on Climate resolution saw a shareholder rebellion against management, with 19.2% of votes against the company’s climate plan. The plan proposed by management was misaligned with the Paris Agreement target of limiting global warming to 1.5C. Barclays is the world’s fourth largest lender to coal companies yet its coal policy is far behind leading practice and contains many loopholes. Moreover, it has not committed to stop financing new oil & gas projects.
Despite the insufficiency of Barclays’ Say on Climate plan, both ISS and Glass Lewis recommended investors vote for it. Among the asset managers assessed, 28 voted for and 22 voted against. Generally, the voting performance of those backing the resolution was worse than those opposing it, with some exceptions. One of the top performing asset managers in our analysis said it voted ‘cautiously’ in favour of the plan.
Asset managers’ rationales demonstrate how decisions to vote for or against a Say on Climate plan conceal nuanced and contrasting opinions towards it. Those opposing the plan mention its deficiencies. One asset manager stated: “A vote AGAINST this item is warranted given that the [company] does not provide a detailed plan further after 2035 up to 2050, absence of a full net-zero by 2050, and does not commit to a regular say-on-climate shareholders' vote”. Others appreciate that Barclays improved its plan and its coal sector policy but that “concerns remain and outweigh the improvement”. Differently, one asset manager opposed the resolution because on principle they oppose delegating climate strategy formation to shareholders and believe it should be the role of the board.
Some asset managers supporting the plan are keen to reward Barclays for improvements made to its plan. One asset manager said that they supported the plan “as the Company has made clear progress and has set clear targets in the short-to-medium term”. We suggest, however, that voting for a company’s climate plan because a company has made some progress is not good enough if the plan is far from alignment with the 1.5C target.
The Barclays case demonstrates that the Say on Climate initiative is encouraging investors to discuss and analyse companies’ climate plans in depth, even if the vote outcome may hide multiple and diverging opinions. For instance, one manager’s rationale demonstrated that they carefully researched Barclays plans and considered the pros and cons of voting. Ultimately, they decided that: “While the bank has made certain improvements, we believe the plan still has critical gaps”. They voted against.
Another manager, meanwhile, assessed whether each Say on Climate plan is in line with either the Science Based Targets Initiative or a MSCI Implied Temperature Rise of 2C or less. Barclays’ plan fulfilled the latter criterion so they voted in favour.
Seven asset managers in our dataset specifically mentioned the plan’s insufficiencies regarding coal. In response to such concerns, Barclays has since announced that it would bring forward its coal phase-out date for the US from 2035 to 2030. This shows that even where Say on Climate resolutions receive majority support, they can still strengthen company climate strategies by giving investors an opportunity to voice concerns
[i] CIFF is one of the philanthropic foundations from which ShareAction seeks funding.
[ii] See our response to the Transition Plan Taskforce’s Call for Evidence on A Sector-Neutral Framework for private sector transition plans and the Glasgow Financial Alliance for Net Zero’s guidance on credible net-zero transition plans.
 ShareAction (2021) Are asset managers using their proxy votes for action on environmental and social issues? https://shareaction.org/report....
 Verney P (2022) Candriam drops support for ‘Say on Climate’ votes, sanctions eight European firms. Responsible Investor.
 Shields K (2022) European banks’ AGMs dominated by climate as boards face shareholder pressure on fossil fuel expansion. In: ShareAction. https://shareaction.org/news/e....
[4,5] Glass Lewis (2022) 2022 Policy Guidelines.
 Lemoine D (2022) ISS à bord, Glass Lewis sur le quai. In: MEDAC. https://medac.qc.ca/salle-de-p....
 Martin J et al. (2022) Why investors should vote against Barclays’ 2022 Say on Climate proposal.
 Kroeger J (2022) Barclays underwhelms with Say on Climate plan. https://shareaction.org/news/b....
 Science Based Targets (2022) Lead the Way to a Low-Carbon Future. https://sciencebasedtargets.or....
 MSCI (2022) Implied Temperature Rise. https://www.msci.com/our-solut....
All links accessed November 2022.