Home > New Analysis: Investors failing to drive climate governance through director votes
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New Analysis: Investors failing to drive climate governance through director votes

9 April 2024


Tuesday 9 April: New analysis* finds board directors of coal, oil and gas companies pushing ahead with new projects continue to be elected with an average of more than 95 per cent of shareholder support, contradicting claims investors are driving improved climate governance through active ownership.

The new report titled – Hot air: How pumped-up active ownership claims are failing our climate – reveals investor support for directors of major fossil fuel developers is not consistently influenced by climate performance, as measured by the Climate Action 100+ Net Zero Company Benchmark Disclosure Framework.

The new analysis shows companies with major fossil fuel expansion plans maintain little alignment with investors’ climate disclosure expectations more than six years after the CA100+ was launched. Yet, there has been no downward trend in support for these companies’ directors, who continued to be elected with almost 97 per cent support on average in 2023.

Will van de Pol, Market Forces CEO said,

“It’s very concerning that the world’s biggest investment firms are failing to live up to their ‘active ownership’ claims when it comes to managing immense climate-related financial risks.

“Major investors are neglecting to use one of the most important tools at their disposal to mitigate risk by bringing coal, oil and gas companies into line with climate goals.”

Market Forces’ new analysis highlights how all directors of companies failing to meet investors’ stated climate risk management expectations must face increased scrutiny and repercussions for inaction.

“Directors of companies continuing to exacerbate climate risks by expanding the scale of the fossil fuel industry must face the credible threat that they will be voted off boards,” Mr van de Pol said.

“We urge all investors to take more meaningful action in line with their active ownership claims, including pre-declaring votes against directors failing on climate risk management.”

  • Market Forces analysed director votes at the 45 coal, oil and gas companies with the largest fossil fuel expansion plans in the Climate Action 100+ (CA100+) ‘focus list’, comparing levels of director support at each company against their performance on the CA100+ Net Zero Company Benchmark Disclosure Framework.

For media inquiries and interviews, contact:
Antony Balmain, +61-423-253-477, [email protected]

Editor’s Note: Key Findings

  • On the three occasions in 2023, where climate concerns were most prominent in director voting rationales, six of the 10 largest CA100+ investor members – including major investors that have recently exited the initiative such as BlackRock, State Street and JP Morgan Asset Management – voted in favour of all of these directors, and none voted against all three (Please refer below or p.10 of the report for details).
  • Since the launch of the CA100+ initiative in 2017, there has been no discernible correlation between a company’s climate performance and voting support for the election of its directors.
  • Over half of the fossil fuel company elected directors received more than 98 per cent support from investors.
  • There is no trend of decreasing support for directors over time, despite the average company only being 40 per cent aligned with the CA100+ framework some six years into the initiative.
  • Directors at companies failing to meet any of the CA100+ criteria demonstrating “The Board has sufficient capabilities/competencies to assess and manage climate-related risks and opportunities” received higher support in 2023 than those that partially or fully met these criteria.