• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

  • 1982340.86ppm

  • 1983342.53ppm

  • 1984344.07ppm

  • 1985345.54ppm

  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

  • 1993356.83ppm

  • 1994358.33ppm

  • 1995360.18ppm

  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

  • 2002372.59ppm

  • 2003375.14ppm

  • 2004376.96ppm

  • 2005378.97ppm

  • 2006381.13ppm

  • 2007382.9ppm

  • 2008385.01ppm

  • 2009386.5ppm

  • 2010388.76ppm

  • 2011390.63ppm

  • 2012392.65ppm

  • 2013395.39ppm

  • 2014397.34ppm

  • 2015399.65ppm

  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

  • 2023421.08ppm

News & Views

Ready to engage? Potentials and pitfalls facing the 2023 AGM season

This year promises to be memorable in the proxy voting space, as institutional investors push for action on climate shareholder resolutions.

Content Tags: Investment Manager  Engagement  US  Europe 

Shareholder resolutions relating to climate and the environment hit a record high in 2022, with investors having filed 215 climate-related shareholder resolutions by late April. Yet support for such resolutions from the four largest asset managers (Vanguard, Fidelity, BlackRock and State Street) faltered, with all supporting proportionally fewer resolutions than they did in 2021.

The competing desires of investor and asset manager are only further complicated by an anti-ESG wave sweeping across the US, with states such as Kentucky and Florida refusing to put money towards managers deemed overly climate-conscious.

All this puts the 2023 AGM season as potentially one of the most interesting and dramatic for the net-zero investor in years.

Early signs

While AGM season typically reaches its peak around March to April, there have already been signs of strong climate resolutions, and ones that can still gather the backing of large asset managers.

In January 2023, responsible investment charity ShareAction co-filed a resolution with the Australasian Centre for Corporate Responsibility directed at Glencore, the world’s largest coal trader. The resolution claims to be the first to target the mining company’s thermal coal production, and will seek transparency on how Glencore’s coal activities align with the Paris Agreement goals the company has pledged to meet. Those supporting the resolution included Legal and General Investment Management and HSBC Asset Management.

Niall Considine, head of asset manager standards at ShareAction, says: “Going forward, we expect the focus of resolutions to continue to evolve from disclosure of climate risks to setting credible, robust decarbonisation targets and developing transition plans to support their implementation.”

ShareAction will release a shortlist of key “Resolutions to Watch” in March 2023, flagging shareholder resolutions where votes in favour are particularly important to address current social and environmental issues.

A key shareholder resolution identified by ShareAction in the 2022 season included Green Century Capital Management calling on insurance giant Chubb to adopt policies that ensure underwriting practices do not support new fossil fuel supplies. Also highlighted was a motion for Credit Suisse to provide disclosure on financing alignment with the Paris goals.

However, while significant percentages backed both motions (19.4% and 22.8%, respectively), none of the resolutions on ShareAction’s 2022 list received majority support from shareholders.

Anti-ESG hits the boardroom

In December 2022, Vanguard left the Net-Zero Asset Owner Alliance. This move coincided with state officials in the US, often aligned with the Republican Party such as Florida CFO Jimmy Patronis, singling out climate reporting and action by asset managers as a failure of fiduciary duty, though Vanguard has not claimed its move to be a direct response to this.

The ShareAction report on declining engagement also mentions the anti-ESG backlash in the US. However, in response to the report, a spokesperson for BlackRock claimed that its drop in support for climate resolutions was due to “revised Securities and Exchange Commission [SEC] guidance, where we observed a marked increase in more prescriptive environmental shareholder proposals, resulting in lower market-wide support”.

Of the potential wider implications of this reduction in support of climate shareholder resolutions in 2023, whether due to outright hostility to the concept of ESG or otherwise, Michiel van Esch, an engagement specialist at asset manager Robeco, says: “The SEC has in recent years made it possible that more proposals actually come to the ballot than before, and I doubt that will change this year.

“What we may see more of in 2023 are resolutions that ask for prioritising shareholder returns or reports versus the negative effects and costs of a climate transition plan.”


Sadly, still in too many cases, asset managers are unwilling to vote in favour of critical climate resolutions.

Simon Rawson, deputy CEO, ShareAction

Institutional pressures

Even with the largest asset managers pursuing proportionately fewer climate shareholder resolutions, a trend likely to continue into 2023, pressure from institutional investors to back investments with strong environmental connections appears to be growing.

According to research from PwC published in October 2022, asset managers globally are expected to increase their ESG-related assets under management to $33.9trn by 2026, from US$18.4trn in 2021. Nine in ten of the 250 institutional investors and asset managers surveyed also believed that asset managers should be more proactive in developing new ESG products.

Of this growing divide between institutional pressure and asset manager inaction, Simon Rawson, deputy CEO of ShareAction, says: “While there is increased appetite among some asset owners to support climate proposals, sadly, still in too many cases, asset managers are unwilling to vote in favour of critical climate resolutions or even split votes.

“These asset managers often cite fiduciary duty as a barrier or argue that while they support the objective, the resolution is the wrong tactic or too prescriptive.”

How to measure success

As well as the debate over which asset manager is supporting which climate resolution and why, the complexities within measuring the effectiveness of climate shareholder resolutions themselves are many and varied. One element is within the data itself, and proving whether such pressures, leading to better reporting and climate-related activities, then actually lead to a reduction in real-world emissions.

Danielle Fugere, president of As You Sow, a non-profit organisation that focuses on shareholder advocacy, says: "Something that I would like to see is an assessment of corporate net-zero targets, and the emission reductions associated with it. As You Sow did a net-zero report last year, that looked at 55 companies and saw overall that you're not necessarily seeing emission reductions aligned with what the company’s stated targets are.”

There is also an ongoing debate regarding exactly when a shareholder resolution can be considered successful. For instance, a January 2022 resolution at Costco in which 69.9% of shareholders voted in favour of a Green Century proposal asking the company to set science-based targets to reduce its emissions, may be considered a success for its majority support. However, a motion with significantly less support may be considered a success if it still motivates the firm to move in a net-zero direction.

Kevin Thomas, chief executive at the Shareholder Association for Research and Education (SHARE), says: “Years ago if you got 10% backing a climate resolution that was a big success, but that threshold has started to change.

“Realistically I don't think there's a single percentage number to call a success, and what's more important is how it relates to the previous percentages on the same company, whether important share owners voted yes or no, and public statements of reasons for doing so.”

Finally there is the longstanding discussion over the wider effectiveness of engagement itself. ClimateAction100+ has been engaging with bodies such as Saudi Aramco for years, often with little to show for it. The aforementioned Glencore will likely be a high emitter for many years regardless of climate shareholder resolutions, raising the question of whether divestment is the better option for the net-zero investor.

However, the results of the CDP’s 2022 Non-Disclosure Campaign showed that more investors are involved than ever, with 260 financial institutions with nearly $30trn in assets participating in the push for greater climate transition reporting from firms.

A key finding from the campaign was that companies were 2.3 times more likely to respond when directly engaged by financial institutions compared to a control group.

Van Esch of Robeco says: “In the larger context, you need both engagement and divestment. If all investors all leave at the same time all of a sudden, then a company no longer has any investors pushing them. But if none of these investors ever declare this inaction has been long enough, we don't see the change, then it also doesn't send a message to a company that there might be consequences for not stepping up.”

Content Tags: Investment Manager  Engagement  US  Europe 

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