ICGN Yearbook - 2021

SquareWell Partners contributes to ICGN’s 2021 Yearbook with an article focusing on Say on Climate (“SoC”) proposals. Now that climate change has been widely considered to be a priority (if not The Priority) for the Planet and Society, investors have been using a variety of tools to mitigate climate-related risks within their portfolios and move the needle on corporate climate action, ranging from collaborative engagement (e.g. Climate Action 100+) to filing or supporting climate-related shareholder proposals. To add to the toolbox, investors now also tested a new concept where they voted on a number of management and shareholder-sponsored SoC proposals in 2021. The SoC campaign, launched by the Children’s Investment Fund Foundation (CIFF), the philanthropic arm of The Children’s Investment Fund (TCI), scored its first success in 2020 by instituting an annual non-binding shareholder vote on a climate action plan of the Spanish airport operator, Aena. The campaign has now spread globally, with more than 20 companies across eight countries having submitted management-sponsored proposals to have their climate action plans approved by shareholders in 2021, with more to come in 2022.

Given the systemic shift that is needed to curve the course of climate change and the physical impacts it could have on companies regardless of their industry, the rationale behind asking companies to submit to a vote on their climate action plans and their progress is understandable. However, acknowledging the SoC campaign’s initial successes, it became clear from our discussions with various stakeholders that the concept will have to strengthen and address a number of concerns for it to be sustainable and
maximise its impact.

To read the full article, you can access the Yearbook here (subscription required).