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Shareholders spur action on climate change

Investor pressure is encouraging some of the world’s biggest companies to step up on sustainability, according to a new report from international sustainability leadership organisation Ceres.

The organisation directs the Investor Network on Climate Risk, which comprises more than 100 institutional investors with combined assets of over US$13 trillion.

Shareholders Spur Action on Climate Change: Company Commitments From the 2014 & 2015 Proxy Seasons is based on information provided directly by 34 institutional investors who provided information on the results their engagement is delivering.

It tracks the implementation of climate change-related corporate commitments made in response to shareholder proposals and dialogues in 2014 and 2015, and also covers commitments to sustainability reporting, greenhouse gas reductions, sustainable agriculture, avoiding deforestation, carbon risks to the fossil fuel industry, governance and water management.

Out of the 101 corporate commitments described in the report, 73 per cent of companies fully “met” their stated commitment, 13 per cent “mostly met” the commitment, and only 11 per cent either “only partially” or “did not” meet their commitment.

“More than ever, companies are hearing loud and clear that investors are concerned about growing sustainability risks and want to see tangible steps to manage and reduce these risks,” director of Ceres’ investor program Chris Davis said.

“Long-term investors – from socially responsible and religious funds to major pension funds and asset managers – are increasingly focused on environmental, social and governance factors that will drive future company performance.”

During the 2015 proxy season, 167 resolutions related to or motivated by climate change were filed by shareholders, the highest number of such resolutions to date.

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