Hotting up - Investor activism on climate and ESG

It has become common in recent years for shareholders to put climate change-focused resolutions on the agendas of listed oil and gas company AGMs. 2020 saw more of these climate proposals and more investor support for them, as well as resolutions being put to banks for financing carbon-intensive businesses.

We see these trends continuing and developing further in 2021. In addition, some investors are calling for all types of listed companies to put their climate transition strategies to a “say on climate” shareholder vote, similar to the existing “say on pay” approvals. In response, the first of such company-led proposals by large UK listed companies are starting to emerge.

In another new trend, shareholder activism in relation to ESG matters is beginning to extend to social matters and not just climate emissions. A requisition recently served on Tesco, the large UK food retailer, seeks to oblige the board to do more to promote healthy diets and tackle obesity.