ESG Viewpoint – Voting for climate action

ESG Viewpoint – Voting for climate action

Discover how we voted for climate action in 2020

With less than 12 months until the critical COP26 climate negotiations, momentum is building towards the ambition to limit the global temperature rise to no more than 1.5°C. Achieving this means aiming for net zero global greenhouse gas emissions by 2050, and a 50% cut in emissions between now and 2030.

The need for urgent action is clear

Columbia Threadneedle itself has committed to an ambition of net zero emissions in our investments by 2050, as part of the Net Zero Asset Managers Initiative.

As part of our stewardship approach, we have been working with other investors to urge companies to align with these goals. However, dialogue alone is not enough, particularly where companies are not meeting even basic expectations or are resistant to engagement.

Fostering climate action through proxy voting

We believe that mobilising our voting power is an essential part of effective climate stewardship. We have developed a voting policy aimed at encouraging the transition to a low-carbon economy. Importantly, this policy is not limited to considering how we vote on climate shareholder resolutions; we also consider how we exercise our votes on management resolutions.
During the 2020 voting season, we implemented a systematic process for identifying investee companies that have fallen behind in climate risk management based on a set of criteria. Where we judged these companies to be climate laggards, we voted against relevant management resolutions, such as the re-election of directors.
We expect our approach to evolve as emerging best practices become better known and adopted across different markets. This evolution will include setting tougher expectations of a greater number of companies and sectors.

Voting against laggards

In 2020 we aimed to send a strong signal to our investee companies across six of the most material sectors that inaction on climate change is not an option. The six sectors covered were:
  • Oil & Gas
  • Mining & Metals
  • Materials
  • Electric Utilities
  • Transportation & Autos
  • Financial Institutions
At the time of writing, we had raised our concerns via 61 management proposals across 58 company meetings. On these, we either voted against management resolutions, abstained, or supported but with communication on the specific conditions for supporting next year’s vote. This dynamic treatment reflected the fact that companies were falling short of our expectations to varying degrees.
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Kalina Lazarova
Kalina Lazarova
Director, Analyst, Responsible Investment

Kalina Lazarova is a governance specialist who joined the firm in 2014. Prior to joining us, Kalina held positions at engagement and voting specialists Governance for Owners and PIRC, and at Fidelity as a governance analyst. She has extensive experience in company engagement, voting, the development of corporate governance policies, and dialogue with policymakers on key governance issues. Her focus has mainly been with European companies, but she also has experience in Asian markets including South Korea and Japan. Kalina studied at Kings College London and has a BA in European Studies and German, as well as an MSc in Regulation from the LSE, and a postgraduate certificate in Finance from Birkbeck. She is bilingual in English and Bulgarian.

Kalina Lazarova
Vicki Bakhshi
Vicki Bakhshi
Director, Responsible Investment

Vicki Bakhshi is BMO Global Asset Management’s Climate Strategist, working on the implementation of their Net Zero commitment, and heading up their climate integration and stewardship work. She also currently co-chairs the IIGCC’s Implementation Working Group for the Net Zero Investment Framework and the Climate Change Working Group of the Investment Association. Vicki has worked at BMO for 14 years, prior to which she worked on the Stern Review on the economics of climate change, and on international climate policy at 10 Downing Street.

Vicki Bakhshi
Derek Ip
Derek Ip
Senior Associate, Analyst, Responsible Investment

Derek Ip joined the firm in 2019 as an Analyst in the Responsible Investment team. He was previously at S&P Trucost, an ESG data provider, which he joined in 2015. He has significant experience consulting banks and investment managers on environmental risks, primarily climate change. During 2017-2018, he acted as an external policy adviser on green finance at the City of London Corporation in parallel to his role at S&P Trucost. Prior to his experience in Europe, he was with RESET Carbon in Hong Kong, providing supply chain sustainability analysis and engagement services to major international brands. Derek studied at the University of Edinburgh and has a MSc in Carbon Finance.

Derek Ip
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The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

Views and opinions have been arrived at by Columbia Threadneedle Management Limited and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

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