investing
Large corporations successfully block shareholder climate proposals
This year's proxy season saw major corporations successfully dismissing many climate-related shareholder proposals, raising questions about SEC's role in shareholder democracy.
In short:
- Climate investors struggled to pass shareholder proposals on emissions and renewable energy, with the SEC approving company requests to exclude 68% of these proposals.
- Companies like Bank of America and Walmart were able to block several proposals on greenhouse gas disclosure, while ExxonMobil took legal action against activist investors.
- SEC's leniency towards companies this year mirrors the Trump administration's approach, despite Biden’s 2021 directive to support shareholder climate information requests.
Key quote:
“Of all institutions, the SEC should understand the importance of these proposals, the importance of shareholder democracy, the ability to raise issues of concern with companies and management and boards.”
— Danielle Fugere, president and chief counsel at As You Sow
Why this matters:
Shareholder proposals are crucial for pushing companies to address climate issues. The SEC's current stance makes it harder for climate activists to influence corporate policies, potentially delaying necessary actions to combat climate change.
Investment firms face challenges under new EU sustainable rules
The EU's new regulations for sustainable investing will force many investment firms to either rename thousands of funds or divest $40 billion in assets.
In short:
- The European Securities and Markets Authority (ESMA) has introduced rules to clarify the criteria for sustainable investment funds.
- Funds labeled as ESG, SRI, or similar will no longer include high-emission industries unless they meet specific environmental standards.
- Major companies like TotalEnergies may be divested from many ESG funds, affecting $3.5 billion in investments.
Key quote:
"Investors should know exactly what they are getting in their mutual funds."
— Andrew Behar, CEO of As You Sow
Why this matters:
Ensuring transparency in ESG funds is crucial for maintaining investor trust and encouraging genuine sustainable investments. As financial markets adapt, the clear labeling will help investors make informed decisions aligned with their environmental values.
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