Carbon emissions resulting in climate change pose increasingly growing material risks to society and corporations. These impacts will reach into every supply chain, capital market, and customer base. A recent study found that more than eight million people died prematurely in 2018 from fossil fuel air pollution. To address these risks and shareholder concerns, companies should establish accredited science-based greenhouse gas reduction targets that adhere to the Paris Agreement and limit global warming to 1.5° Celsius from pre-industrial levels.
Say on Climate is a global initiative that addresses climate risks by offering companies a standardized and comparable way to put forth a net-zero transition plan, with the added benefit of annual shareholder feedback. This will enable companies to have long-term plans, disclose how they are doing to hit their milestones, and provide a mechanism for shareholders to be part of the process. This alignment of incentives can also result in compensation linked to climate change transition success.
Leading investors are rallying behind net-zero climate transition plans with shareholder voting. UN climate envoy Mark Carney said Say on Climate “would establish a critical link between responsibility, accountability and sustainability.” BlackRock’s CEO Larry Fink also is calling for “companies to disclose a plan for how their business model will be compatible with a net zero economy.” Over the past five months, several companies have agreed to voluntarily adopt Say on Climate after shareholder advocacy by Chris Hohn, founder of the London-based Children’s Investment Fund Foundation (CIFF). These companies include Spanish airline operator Aena, Unilever, Moody’s, Canadian National, Shell, Rio Tinto, and Glencore. These climate leaders show that Say on Climate is feasible and effective. In addition, proponents have filed resolutions with major companies including Alphabet, S&P Global, and Canadian Pacific Railway.
Shareholder advocates from the United States, Canada, Europe, Asia, and Australia are engaging companies and filing resolutions; aiming to get every public company to adopt Say on Climate in the next three years. In the United States, As You Sow filed Say on Climate resolutions at Union Pacific, Monster Beverage, and Booking Holdings and plans to file hundreds of resolutions in the next two years unless companies voluntarily adopt the initiative. To date, As You Sow has also sent letters to and is meeting with 125 companies, including Microsoft, Pfizer, and General Mills.
As You Sow has integrated the rigorous metrics of the Climate Action 100+ benchmark into the Say on Climate proposals. This benchmark is supported by $52 trillion of assets under management and establishes comparable metrics that assess corporate progress toward net-zero 2050 emissions.
For the world’s countries to hit their Paris goals, the world’s companies must participate. Say on Climate is an equitable and comprehensive way to achieve the safe, just, and sustainable future that awaits us all when we unite to take on this global threat.
Chris Hohn
Founder, Children’s Investment Fund Foundation
Andrew Behar
CEO, As You Sow