Further to its position articulated last year on “Say-on-Climate” proposals, Vanguard’s newly published perspective generally discourages management-proposed Say-on-Climate proposals due to the absence of consensus and still-developing standards and practices surrounding the actual vote as well as the substance of the proposals, in addition to the potential unintended consequences and motivations associated with such votes. Vanguard is more likely to be supportive of an appropriately structured management-proposed Say-on-Climate vote at companies for which climate change-related risks are material to help inform investor perspectives about the company’s climate-related disclosure. Where climate-related risks are low, Vanguard may question the costs to the company relative to the purported benefits associated with such a vote.
Notwithstanding the stated concerns, the piece nevertheless provides guidance to companies that plan to proceed with a management-proposed Say-on-Climate vote, as well as reiterates Vanguard’s expectations concerning board oversight of material climate-related risks and climate-related disclosure.
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This post first appeared in the weekly Society Alert!