Investors file record number of climate resolutions for North American companies

By Thomson Reuters Mar 26, 2024 | 6:09 AM

By Ross Kerber

BOSTON (Reuters) – A record 263 climate-related shareholder resolutions have been filed so far this year for annual meetings of North American companies, a new tally showed on Tuesday, with proponents tailoring their wording to gain support.

Officials at sustainability nonprofit Ceres said the trends they found show investors and corporate executives remain interested in countering rising global temperatures despite a drop-off in support for the measures from big asset managers.

They pointed to a resolution that won 57% support at Jack in the Box on March 1, asking the restaurant operator to report certain greenhouse gas emissions and its goals to reduce them. The resolution stated rival McDonald’s already does such reporting and called Jack in the Box’s efforts “sporadic.”

Such company-specific details can help sway top fund managers, said Kirsten Snow Spalding, vice-president of the Ceres Investment Network, an arm of the organization.

In wording their resolutions, “investors are getting much sharper about the specific business case,” Spalding said in an interview.

Jack in the Box had opposed the proposal, calling it premature pending more clarity around new state and federal disclosure rules. The company did not respond to requests for comment.

Shareholder resolutions related to environmental, social and governance (ESG) topics have dominated various corporate meetings in recent years but have gained less traction since 2022.

Merel Spierings, senior research for The Conference Board, a nonprofit business membership and research organization, said she expects support for environmental resolutions will keep falling as investors become satisfied that companies have been issuing more details about the ESG impact of their operations.

But outcomes like at Jack in the Box show “investors continue to be discerning” and willing to support some resolutions, Spierings said.

Boston-based Ceres says it convenes conversations among investors. It has been targeted by U.S. Republican politicians who say it appears to facilitate potential breaches of antitrust law.

Proposals related to climate and other environmental topics account for the largest share of ESG proposals tracked by the Sustainable Investments Institute in a separate report. Shareholder proponents have already made deals to withdraw 56 of the resolutions so far this year, according to Ceres, compared with 83 such deals in 2023 and 116 in 2022.

For instance New York Comptroller Brad Lander, who oversees worker retirement assets, last week described deals with JPMorgan and Citigroup to disclose comparative details of their lending for low-carbon energy and for fossil fuels.

U.S. securities regulators made it easier for ESG resolutions to reach corporate ballots in late 2021. More were then filed, but the decision has been cited by Exxon for allowing too many ballot items.

(Reporting by Ross Kerber; Editing by David Gregorio)