Climate breakdown: raising the bar for company directors

We co-signed a submission by ShareAction – one of our grantees – calling for a more ambitious use of shareholder voting powers to drive action on climate change at companies.

The submission responds to a consultation by Institutional Shareholder Services (ISS) on updates to its voting guidelines and research. While this may seem like a technical aspect of responsible investment and corporate accountability, we believe it can have a significant impact on how trillions of dollars of investment capital are exercised to drive change in corporate boardrooms. 

As we saw with the shareholder resolution we co-filed at Barclays bank earlier this year, shareholders – including endowed charities, universities and pension funds – can use their voting rights to influence the management and strategy of the companies they invest in. Lankelly Chase is committed to putting our endowment actively in service of our mission.

As the world’s largest shareholder voting advisor, ISS’s assessments are used by more than 2,000 investors when casting their votes at company Annual General Meetings (AGMs). Many of these are large investment institutions managing the funds of an even greater number of underlying clients.

Our submission strongly supports ISS’s proposal to start voting against company directors who are failing to show leadership on climate change mitigation, and urges it to take a systemic approach rather than be limited to the most obvious or egregious cases. 

We call for ISS to make a robust assessment of whether companies’ alignment with a 1.5C cap on global heating – including looking at their strategy, science-based targets, and lobbying activities – and to adopt this stronger approach in time for companies’ AGMs in 2021. 

You can read the full response here.

Dominic Burke

Investment Director