16 January 24
- New guidance is designed to support asset owners and asset managers in the development of their own net zero voting policies and practices.
- The guidance highlights voting as a critical lever for investors to help support the decarbonisation of the real economy as part of their climate focused engagements and in line with fiduciary duties.
- The guidance aligns with the Net Zero Investment Framework and its recommendation for a voting policy consistent with assets in the portfolio achieving net zero emissions by 2050 or sooner.
The new guidance – Net Zero Voting Guidance – is based on the importance of engagement and stewardship as a mechanism to drive alignment with the goals of the Paris Agreement.
In this context, the guidance states that ‘votes are an invaluable instrument in the stewardship toolkit’ and that ‘the right to vote allows investors to protect the interests of their clients and beneficiaries and the value of their investments’.
Net zero commitments
Investors that have made individual commitments to net zero through the Net Zero Asset Managers and Paris Aligned Asset Owners initiatives are expected to develop stewardship strategies with a clear voting policy that is consistent with the ambition for all assets in the portfolio to achieve net zero emissions by 2050 or sooner.
Similarly, under the Net Zero Investment Framework, investors are expected to publish a voting policy that aligns to the net zero objectives of the framework.
Accordingly, the new guidance is designed to support investors in developing their own net zero policies and practices.
Three core principles
Specifically, the guidance outlines three core principles underpinning the concept of net zero voting. The principles, which are accompanied by key considerations in the paper, are that voting:
- Aligns with the investor’s own net zero objectives and targets
- Communicates net zero expectations
- Supports net zero stewardship, engagement and investment approaches
Laith Cahill, IIGCC’s Senior Net Zero Stewardship Specialist, said: “There is no one size fits all approach to voting. This paper embraces those differences, setting out three principles that will help investors develop bespoke voting policies and actions that effectively support and communicate their net zero objectives and targets to companies. While voting is only one tool amongst many in the stewardship toolkit, utilising the full range of resolutions and options available to shareholders is important for investors seeking to secure real world emissions reductions.”
ENDS
About IIGCC
IIGCC brings the investment community together to work towards a net zero and climate resilient future. We create change the world needs by unlocking investor action on climate change.
Our work supports investors in generating returns for clients and beneficiaries, which in turn provides financial wellbeing for future generations. We work with our members to address climate risk and ensure they are well positioned to make the most of investment opportunities offered by climate mitigation and adaptation efforts, ensuring that their investments contribute towards a better world for us all to live in.
Our team supports investors to create practical solutions that can make a real difference in tackling climate change – providing guidance and support on investment practices, policies and corporate behaviours that have real impact and deliver change that the world needs. For more information visit www.iigcc.org and @iigccnews
Media contact
Marguerite Ohan, Media and Communications Officer, IIGCC
Disclaimer: All communications and initiatives undertaken by IIGCC are designed solely to support investors in understanding risks and opportunities associated with climate change and take action to address them. Our work is conducted in accordance with all the relevant laws, including competition laws and acting in concert rules. IIGCC’s services to members do not include financial, legal or investment advice. The views expressed here do not necessarily represent those of all IIGCC members.
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