Say On Climate resolutions at Aena

Aena adopted Say On Climate shareholder resolutions proposed by TCI requiring it to publish a multiannual comprehensive climate transition action plan and to put this to an advisory shareholder vote on an annual basis, and to amend its byelaws accordingly so a vote occurs automatically every year.

This follows a letter sent by TCI to Aena’s CEO in November 2019 which identified areas for improvement in Aena’s sustainability and climate plans [1].

Aena then produced an updated Climate Action Plan that makes several improvements on its previous plans, including a target to generate all of its energy from renewable sources by 2026. It also includes a commitment to further update the plan in 2021 to set out annual decarbonisation objectives covering scopes 1, 2 and 3 and a programme of actions to achieve those objectives [2].

Following further engagement with TCI, Aena’s Board changed its recommendation from opposing the resolutions to supporting them, and made the following statement [3]:

“the Board has decided to take the initiative that Aena not only have a solid plan to deal with climate change, but also, in the interests of transparency and the participation of its shareholders in the development of this plan, be the first Spanish company to incorporate the obligations it undertakes in this fundamental problem into its articles of association. In addition, proposes the intervention of the General Shareholders’ Meeting with consultative voting capacity on these plans.”

While there remains significant room for improvement in Aena’s updated Climate Action Plan, the accountability mechanism introduced by an annual shareholder vote will enable shareholders to ensure continued progress.

Proxy advisers supported the resolutions at Aena

The Say On Climate resolutions filed by TCI at Aena were endorsed by the main proxy voting advisers Institutional Shareholder Services (ISS) and Glass Lewis, in both their standard and sustainability advice. Corporance, the Spanish partner of the ECGS network of European proxy firms, also recommended voting for the proposals.

Based on the ISS and Glass Lewis voting guidelines and the precedent set by the recommendations at Aena, there is a good likelihood that proxy advisers will support similar proposals elsewhere.

Virtually unanimous support from other investors

Support for the Say On Climate resolutions at Aena was almost unanimous [1]:

• 98.15% of shareholders voted in favour of holding an annual advisory vote on Aena’s Climate Action Plan
• 96.52% of shareholders voted in favour of amending the company’s byelaws accordingly

BlackRock voted in favour

BlackRock Investor Services released a bulletin to explain its support for the Say On Climate resolutions, which notes [2]:

“BIS determined to support the request for an annual report on progress towards the climate action plan goals because this is inherently consistent with our expectations that companies have a plan to transition their business models and to explain and justify progress against the plan in their annual reporting. We believe such a report would be beneficial at Aena given the material risk to its business model and its need to accelerate its efforts. An annual advisory shareholder vote on the company’s plans and progress would give management and the board a clear sense of the level of shareholder support for the steps necessary in the transition.”

This is a global first. It sets a precedent for other investors, proxy advisers, companies and regulators, and shows the effectiveness of an engaged shareholder willing to file resolutions on climate change.

Positive media reaction to Say On Climate at Aena

International, specialist and local Spanish media all welcomed the adoption of Say On Climate by Aena but missed the opportunity for Aena to be seen as progressive by adopting this voluntarily: