Guide to taking action for companies
Companies all over the world are working to reduce their emissions in line with a 1.5°C pathway with the help of climate transition plans. Find out more about their targets and commitments below.
Why take action as a company?
The evidence is clear: climate change is an increasingly material risk that businesses must manage. For companies, the failure to take sufficient measures to address climate change and move towards net-zero emissions will have “severe consequences” including bankruptcy, according to former Bank of England governor Mark Carney.
Not surprisingly, as the transition to a net-zero emissions economy accelerates, investors are looking for companies to demonstrate that they are planning proactively to ensure their business models remain competitive in a decarbonised world. But currently, less than 1% of businesses have credible climate transition plans in place.
By publishing a credible climate transition plan and putting this to an annual shareholder vote, companies can demonstrate the resilience of their business models and their commitment to dialogue with shareholders.
How can your business benefit from ‘Say on Climate’ vote?
How to take action as a company
A step-by-step process
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 bylaws accordingly so a vote occurs automatically every year.
Aena then produced an updated climate transition 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.
While there remains significant room for improvement in Aena’s updated climate transition 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.
Support for the Say On Climate resolutions at Aena was almost unanimous:
BlackRock Investor Services released a bulletin to explain its support for the Say On Climate resolutions, which notes:
“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 was 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:
- FT: “Spanish airports operator Aena is set to become the first company in the world to give shareholders an annual vote on its effort to tackle climate change.”
- RI: “Chris Hohn’s climate win at airport infra firm Aena is a game changer in government/investor activism in Spain and internationally.”
- Reuters: “Aena shareholders approve action plan against climate change.”
- Expansión: “El plan climático de Aena marca una nueva era.”