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Sustainability Matters

Proxy Process Opens Door to Constructive Engagement on Climate

The number of resolutions and the increasing levels of support reflect shareholders' growing concerns about the climate-resilience of their portfolios.

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Shareholder support for climate-related resolutions climbed to an all-time high of 30% in 2019’s proxy season, with the number of resolutions coming to a vote declining significantly. Those are not contradictory developments. Many proposed resolutions were withdrawn prior to votes because shareholder sponsors and company management teams sat down and had a constructive dialogue, leading to the requested action being taken. In a less-positive development, though, some resolutions were removed from the proxy ballots in 2019 because the SEC issued “no-action” letters.

Since 2004, shareholders have voted on well over 400 resolutions asking companies to report on the business risks of climate change and disclose strategies for addressing these risks. The number of resolutions and the increasing levels of support reflect shareholders’ growing concerns about the climate resilience of their portfolios.

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Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.